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Perspectives
International Business Law

Effective protection of trade secrets

Requirements for confidentiality measures and the burden of pleading and proof in trade-secret cases, with notable rulings on catch-all employment clauses.

Peter Poleacov 3 min

Effective protection of trade secrets

Background

On 26 April 2019, the German Trade Secrets Protection Act (Geschäftsgeheimnisgesetz, GeschGehG) entered into force, transposing Directive (EU) 2016/943 on the protection of trade secrets against unlawful acquisition, use, and disclosure into German law. Since then, several court decisions have been issued, summarized below.

Case law

Labor Court of Aachen, judgment of 13 January 2022 – 8 Ca 1229/20

  1. Where the defendant plausibly argues that competitors could have obtained the secret information through reverse engineering, the claimant must plead and, where necessary, prove in substance that knowledge not known on the market underlies its products.

  2. Where the defendant denies that reasonable confidentiality measures within the meaning of Section 2 No. 1 lit. b GeschGehG have been taken, the claimant must plead and, where necessary, prove in detail, with reference to specific information, which protective measures it has put in place to keep that information confidential.

  3. A blanket clause in the employment contract (see below) that extends to all operational information received during the employment relationship (a so-called catch-all clause) is not an adequate confidentiality measure within the meaning of Section 2 No. 1 lit. b GeschGehG.

"Mr/Ms [first and last name] shall maintain silence on all operational and trade secrets, as well as on all other matters and processes of the company that come to his/her knowledge in the course of his/her work. He/she shall ensure that no third party gains unauthorised knowledge thereof."

Higher Labor Court of Baden-Württemberg, judgment of 18 August 2021 – 4 SaGa 1/21

  1. The court held that the price calculation at issue was the subject of confidentiality measures appropriate to the circumstances within the meaning of Section 2 No. 1 lit. b GeschGehG and qualified as a trade secret under Section 2 No. 1 GeschGehG. The claimant had implemented, among other things, a concrete IT policy, a need-to-know principle, and a corporate compliance system. The claimant had also used a contractual clause by which the defendant (a compliance officer) was bound to confidentiality regarding trade secrets, including after termination. In the court's view, this clause was not too broadly framed: "operational and trade secrets connected with the management of [name of business area] and with confidential matters of the management board and the senior management" were expressly identified.

  2. An interim injunction prohibiting the use of a trade secret is unavailable for lack of a risk of first commission or repetition where the defendant's affidavit establishes that the defendant no longer holds the trade secret (see also Higher Labor Court of Rhineland-Palatinate, judgment of 25 January 2021 – 3 SaGa 8/20).

Practice notes

  • Catch-all clauses are invalid under the German rules on Standard Terms because they go beyond the employer's legitimate interests. The employer's legitimate business interest in confidentiality has to be tied to specific data and matters (see also Higher Labor Court of Düsseldorf, judgment of 3 June 2020 – 12 SaGa 4/20; Higher Labor Court of Cologne (2nd Chamber), judgment of 2 December 2019 – 2 SaGa 20/19). This is also the prevailing view in legal literature (see Fuhlrott/Fischer NZA 2022, 809 (812); Köhler/Bornkamm/Feddersen/Alexander UWG, 40th ed. 2022, GeschGehG § 2 marginal no. 61 a; Apel/Stolz GRUR-Prax 2021, 1 (2); Hauck GRUR 2022, 530 (535); Hoeren/Münker MMR 2021, 523 (524); Holthausen NZA 2019, 1377 (1380)).

  • In a dispute, the claimant bears the burden of pleading and proof for the existence of a trade secret and the implementation of adequate confidentiality measures.

  • According to the Labor Court of Aachen, the claimant's submissions on the adequacy of confidentiality measures must not be confined to generic descriptions of the overall protection level. They require a detailed account of the specific measures taken (trade-secret management), with particular focus on the specific information at issue. Beyond a list of measures, the claimant must describe specifically how those measures protect the information at issue.

  • Both decisions contain important guidance on adequate confidentiality measures and are worth reading for that reason alone.

Reference: Poleacov, P. (2025). Effective protection of trade secrets. INN.LAW. https://inn.law/en/perspectives/protection-trade-secrets/