To some extent existing provisions of German law already covered the issues addressed by the Trade Secret Directive (TSD): Section 17 of the German Act of Unfair Competition protection protects against unlawful disclosure of trade and industrial secrets. Additionally, the German Civil Code grants protection of trade secrets pursuant to Sections 823 and 826 in conjunction with Section 1004. However, as the existing rules do not fulfil all the requirements of the TSD, more specific civil law implementation was necessary in order to provide the required level of legal certainty for those owning trade secrets.
Stage of legislative process
The new Act on the Protection of Trade Secrets (Gesetz zum Schutz von Geschäftsgeheimnissen, „GeschGehG“) came into force on 26 April 2019.
Timescale for implementation
The new Act on the Protection of Trade Secrets (Gesetz zum Schutz von Geschäftsgeheimnissen, „GeschGehG“) came into force on 26 April 2019.
Noteworthy points arising from the legislative changes
The TSD is going to be implemented by the new Act on the Protection of Trade Secrets providing protection against unlawful acquisition, usage or disclosure of trade secrets (Gesetz zum Schutz von Geschäftsgeheimnissen).
If enacted as proposed the Act on the Protection of Trade Secrets will focus on four key issues:
clear definitions of legal terms (e.g. "trade secret") and prohibited acts in relation to trade secrets
claims that owners of a trade secret can raise against an infringer;
provisions on civil procedures in case of trade secret infringements;
new penalty provisions currently stipulated in the German Act regarding Unfair Competition
The Act on the Protection of Trade Secrets is expected to provide for three different remedies
Compensation of damage
Claim for destruction of trade secrets (by handing to a court clerk)
Claim for an account of profits
The qualification of information as a trade secret requires that the owner of the trade secrets applies “appropriate measures to ensure non-disclosure of trade secrets”. The lack of such measures results in a complete loss of protection.
Whistleblowers are protected under the current draft if their disclosure is likely “to protect the public interest”. In difference to prior drafts, the protection of whistleblowers does not rely on the purpose of the disclosure anymore. This change was made in the last minute in order to allow the disclosure even in cases where monetary gain (e.g. rewards for whistleblowing) might be the main intent.
