Trade Secrets Act – Protection & Rights | IT-Medienrecht

The Trade Secrets Act (GeschGehG): An Overview

The Trade Secrets Act (GeschGehG), which came into force on April 26, 2019, aims to protect trade secrets from unauthorized acquisition, use, and disclosure. This crucial piece of legislation transposes EU Directive 2016/943 into German law, replacing previous regulations found in the Unfair Competition Act.

Its implementation has significantly changed the landscape for businesses, emphasizing the need for proactive measures to safeguard valuable information and protect intellectual property.

Definition of a Trade Secret

According to Section 2 No. 1 GeschGehG, a trade secret is defined as information that meets three specific criteria:

1. It is not generally known or readily accessible to persons in circles normally dealing with this type of information, either in its entirety or in the precise arrangement and composition of its constituents, and is therefore of economic value.
2. It is subject to appropriate confidentiality measures by its lawful holder.
3. There is a legitimate interest in its confidentiality.

Key Aspects of the Trade Secrets Act

The GeschGehG introduces several important provisions for the protection of confidential business information:

1. Requirements for Protection: Unlike the previous legal framework, companies must now actively implement appropriate confidentiality measures to benefit from legal protection.
2. Permitted Acts: The law clearly defines certain actions as permissible. These include, for instance, the independent discovery or creation of a trade secret.
3. Prohibitions on Action: Conversely, the Act outlines specific actions considered unlawful. These encompass the unauthorized acquisition, use, or disclosure of trade secrets.
4. Exceptions: The law also provides for exceptions to its applicability. These might include protections for whistleblowers or provisions safeguarding employees' information and consultation rights.
5. Legal Consequences: In cases of violations of the Trade Secrets Act, the owner of the trade secret is entitled to various claims. These can include demands for removal of the violation, injunctions, damages, and information disclosure.
6. Special Procedural Features: The Act includes specific provisions for protecting trade secrets during court proceedings.

Implications for Businesses

For companies, the Trade Secrets Act necessitates a thorough review of their internal processes and protective mechanisms. Businesses must adapt these measures to ensure the legal protection of their trade secrets. This involves both technical and organizational safeguards, as well as robust legal frameworks, especially concerning intellectual property and software ownership.

Conclusion

The GeschGehG significantly strengthens the protection of trade secrets in Germany. Companies are urged to establish and maintain comprehensive confidentiality measures to comply with the new requirements. Proactive compliance is essential to leverage the full legal benefits offered by this Act and mitigate potential risks.