Newsletter: Now it is official – Germany has a new law to protect trade secrets

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The parliamentary procedure to enact the so-called “Trade Secrets Act” has been completed and the new regulation will come into force in a few days.

So far, the protection of secrets has been inconsistent and, above all, unclear. Relevant provisions could be found in the Criminal Code, in the Act against Unfair Competition (§§ 17 to 19 UWG) and in the Civil Code (§§ 823, 826 BGB).

The new regulation, which is based on an EU directive, also brings some new requirements for companies:

Securing trade secrets through protective measures

In future, only such information that is protected by “appropriate confidentiality measures” will be protected by law.

In order to be able to comply with a corresponding duty of proof in the event of a dispute, companies should now immediately review their information and knowledge management and update it if necessary: Confidential information must be categorized and classified, and suitable internal structures and processes should be established. Accompanying IT and software-based documentation and security systems as well as strict compliance processes should be implemented promptly.

Reverse engineering permissible

The previously controversial so-called “reverse engineering” is now expressly permitted by the new law as a permissible form of decoding trade secrets. Anyone wishing to protect themselves against this will in future have to make contractual arrangements with their business partners.

More protection for whistleblowers

Whistleblowers who wish to uncover illegal actions within the company or professional misconduct by colleagues or superiors no longer act unlawfully or are liable to prosecution, even if they thereby violate (e.g. labour) contractual confidentiality obligations or disclose protected trade secrets.

However, it is still generally considered necessary for a whistleblower to first contact an internal reporting line – if one exists. For companies that do not yet have such a whistleblower helpdesk system or hotline, it is high time to catch up, especially as such a system will be mandatory for almost all companies by 2021 at the latest.

Would you like to receive further information? We look forward to hearing from you!

Sina Janke
Associate
Commercial/Compliance
T +49 89 3090 556 00
M +49 173 7291 416
E sina.janke@arqis.com

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