New rules
for
Trade secrets.
New rules
for
Trade secrets.
from
The legal framework for the protection of trade secrets has changed. The German legislator has now also implemented the so-called Know-How Protection Directive with the passing of the Trade Secrets Act. What companies must now do.
Background on trade secrets
Until now, trade secrets have been protected under German law via criminal norms in competition law . These also allowed third parties to be held liable under civil law in the event of infringements. In order to be able to assert corresponding claims, it had to be a trade secret, which could sometimes be any internal information of a company.
However, the requirements for protection have changed as a result of Directive (EU) 2016/943, the so-called Know-How Protection Directive. This should have been transposed into German law by June 2018. However, it has only now been implemented with the adoption of the Trade Secrets Act (GeschGehG).
What changes will the Trade Secrets Act bring for companies?
One significant change is the definition of a trade secret. In future, a trade secret will only be information that
- is not generally known or readily accessible, either as a whole or in the precise arrangement and composition of its components, to persons within the circles that normally deal with this type of information and is therefore of commercial value
- is the subject of confidentiality measures appropriate to the circumstances by its legitimate owner.
This means that the entrepreneur who wants to take action against an infringement of their trade secrets in the future must, among other things, demonstrate and, if necessary, prove that the trade secret has an economic value because it is secret and that the entrepreneur has taken appropriate confidentiality measures to protect the trade secrets. The measures include technical, organizational and legal measures to protect the trade secrets. The requirement of appropriate confidentiality measures has not existed under German law to date.
It is therefore advisable for companies to draw up a protection concept which can serve as documentation and, in the event of a dispute, as proof of the appropriate confidentiality measures.
For some technical and organizational measures, it may be possible to fall back on measures that were implemented as part of the implementation of the GDPR, although the direction of protection is different here. In addition to technical and organizational measures, legal measures, e.g. confidentiality agreements, must also be concluded and amended.
Ultimately, when developing a protection concept, it is important to ask which information should and can be protected as trade secrets in the future. This information should then be categorized according to importance in order to develop appropriate confidentiality measures.
Conclusion
Companies must act now in order not to lose the protection of their trade secrets. Without an adequate protection concept, there is a risk that confidentiality protection for the trade secrets concerned will be lost for good.
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