Trade Secrets Act

The Trade Secrets Act (GeschGehG) came into force on April 26, 2019 and serves to protect trade secrets from unauthorized acquisition, use and disclosure. It transposes EU Directive 2016/943 on the protection of trade secrets into German law and replaces the previous regulations on the protection of trade secrets in the Unfair Competition Act.

Definition of a trade secret:

According to § 2 No. 1 GeschGehG, a trade secret is information,

(a) which is not generally known or readily accessible to persons in the circles normally dealing with this type of information, either in their entirety or in the precise arrangement and composition of their constituents, and is therefore of economic value;

(b) the subject-matter of the circumstances is subject to appropriate confidentiality measures by its lawful holder;

c) for which there is a legitimate interest in confidentiality.

Key aspects of the law:

1. requirements for protection: In contrast to the previous legal situation, companies must now actively take appropriate confidentiality measures in order to enjoy the legal protection. 2. permitted acts: The law defines certain acts as permitted, such as the independent discovery or creation of a trade secret. 3. prohibited acts: Acts are defined that are considered unlawful acquisition, use or disclosure of trade secrets. 4. exceptions: The law provides for exceptions, for example to protect whistleblowers or to exercise employees’ rights to information and consultation. 5. legal consequences: In the event of violations of the law, the trade secret holder is entitled to various claims, including removal, injunctive relief, damages and information. 6. special procedural features: The law contains special provisions for the protection of trade secrets in court proceedings. For companies, the Trade Secrets Act means that they must review their internal processes and protective measures and, if necessary, adapt them in order to guarantee the legal protection of their trade secrets. This includes technical and organizational measures as well as legal measures.