New ways of protecting trade secrets

The protection of trade secrets used to not be regulated uniformly in Europe. In June 2016, the EU Commission therefore issued a directive aimed at setting uniform standards throughout Europe. We had already reported on this and our partner Alexander Haertel regularly speaks on this topic. The transposition deadline expired in June 2018, at which time there was only one draft bill for the creation of a new law. The government draft dates from 18.07.2018.

According to the motto what lasts a long time will finally be good, now the legislation could be successfully completed. The German Bundestag is discussing today the new law for the protection of trade secrets (GeschGehG). Last week, on 13.03.2019, the committee responsible for legal affairs and consumer protection published a recommendation for a decision. Accordingly, the Committee recommends that the Bundestag adopt the original government draft in an amended form. Already on 11.10.2018 the Bundestag discussed the government draft controversially, so that changes were foreseeable.

Politically, the previous draft provided for discussions because various representatives were concerned that the work of the press could be restricted. This is therefore the basis for the major changes compared with the government draft. The Committee also proposes that the definition of ‘trade secret’ be amended to include a ‘legitimate interest in confidentiality’. With this amendment, the Committee wishes to follow recital 14 of the Directive and take account of the case-law of the Federal Constitutional Court.

In this debate, the political cause for controversy is that the committee is opposing the SPD-led Federal Ministry of Justice and Consumer Protection with this proposal. Whether the Bundestag follows the recommendation of the Committee on Legal Affairs and Consumer Protection therefore remains exciting.

With the establishment of the GeschGehG, Germany is initiating a radical change in the system. While the standards for the protection of secrets in the Unfair Competition Act (UWG) were previously designed as criminal rules, now there is an own law with civil law claims to use at one’s disposal. Under those new provisions, the entitled holder of a trade secret may invoke the entire canon of claims under the Enforcement-Directive. The extended possibilities for the protection of trade secrets in court proceedings are particularly to be welcomed. The downer, however, is that this extended protection only applies to proceedings for possible infringement of trade secrets. It would have been desirable to integrate these provisions into the Code of Civil Procedure (ZPO) so that extended protection of trade secrets is also possible in patent litigation.

Update 22.03.2019: This night the Bundestag has followed the recommendation of the Committee and adopted the government draft in an amended form.

From: Alexander Haertel and Carsten Plaga