Trade Secrets Directive - Effective Business Framework

Author:Mr Thomas Mayer
Profession:Gowling WLG

The GeschGehG transposes the Directive (EU) 2016/943 on safeguarding undisclosed know-how and undisclosed business information in Germany. Prior to the adoption of this Directive, safeguarding trade secrets was non-uniform in Europe, ranging from intangible regulations in Italy and France up to claims for "breach of confidence" in the United Kingdom. In the sense of coherent trade secret safeguards in the European internal market, the Member States therefore had to commit themselves to provide minimum safeguards for trade secrets under civil law.

Regulations with regard to content

Firstly, the GeschGehG defines what a trade secret is: information that is (a) neither as a body nor in the precise configuration and assembly of its components, generally known or readily accessible and therefore has economic value, that is (b) subject to reasonable steps to keep it secret under the circumstances, and (c) where there is a legitimate interest in keeping it secret. The term information encompasses technical know-how, i.e. procedures, design plans, algorithms, prototypes or formulations, and also business information, i.e. lists of customers, business plans, or advertising strategies. Such information must show economic value specifically for its being undisclosed. This is the case if its unauthorised use or disclosure is likely to harm its proprietor in that it undermines that party's scientific or technical potential, business or financial interests, strategic positions or ability to compete. A potential value is sufficient though so that for example research findings are safeguarded even if immediate use is not intended.

Taking reasonable steps for maintaining secrecy

The prerequisite of the existence of reasonable steps for maintaining secrecy is of particular importance. In terms of law this is an obligation, as such the proprietor forfeits safeguarding any secret if there is a failure to provide appropriate steps for maintaining secrecy. The provision demands "appropriate" but not absolutely effective or optimal safeguards. The statement of grounds for the law indicates as the criteria for appropriateness, the value of the trade secret, its importance for the business, the size of the business, the customary steps for maintaining secrecy in that business, the type of labelling of the information, and agreed contractual regulations with business partners and workers.

In summary, the steps for maintaining secrecy must be distinctive in...

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