Companies are obliged to implement measures to maintain secrecy
Düsseldorf, 25 April 2019 – The new Trade Secrets Act (GeschGehG) was announced in the Federal Law Gazette on April 25, 2019 and will enter into force on April 26, 2019. The GeschGehG protects trade secrets against unlawful acquisition, unlawful use and unlawful disclosure. Trade secrets include, in particular, technical know-how that is not protected by patents. The new law is therefore of particular importance for companies whose success is based on innovation.
The directive on which the GeschGehG is based is intended to harmonize the level of protection of trade secrets throughout the European Union and to strengthen their protection. Up until now such protection has been enforced in Germany under criminal law provisions, supplemented by sophisticated case law that has offered protection additionally under civil law. Now, for the first time, such protection has been codified into German civil law.
Trade secrets are still defined as secret (i.e. not publicly known) information of economic value. Potentially the most important change in the GeschGehG, however, is that trade secrets may only be protected if companies have taken "appropriate measures” to maintain their secrecy. In contrast to previous legislation, such measures are now not only necessary to prevent the loss of trade secrets, they are also necessary to obtain legal protection for trade secrets in the first place. "This new regulation could entail far-reaching obligations for companies’ internal organizational approaches to handling trade secrets. The act, however, does not specify what these are. This is where it will be necessary to regularly review the internal measures implemented, based on updated case law", says Dr. Reinhard Fischer, attorney-at-law at Cohausz & Florack. However, companies should be aware that they may need to meet stricter requirements to ensure protection for their trade secrets. They should therefore already be critically assessing how they deal with trade secrets and, if necessary, adapt their approach while properly documenting protective measures and checking whether these are observed in the company.