LAG Düsseldorf – Requirements for contractual regulations as an appropriate measure for the protection of trade secrets

The German Act on the Protection of Trade Secrets (GeschGehG), which came into force on April 1, 2019, has still only been the subject of court decisions to a very limited extent. Accordingly, there is still a great deal of uncertainty as to how the constituent elements of the law will ultimately be interpreted by the courts and what consequences this will have in practice.

The Düsseldorf Regional Labor Court (ruling of June 3, 2020 – 12 SaGa 4/20, available here) has now issued a decision on whether and under what conditions contractual regulations can be appropriate measures for the protection of trade secrets within the meaning of § 1 b) GeschGehG.

Contractual provisions alone can also constitute adequate protection measures – if they are sufficiently concrete

The court initially stated that in principle contractual provisions alone can also be regarded as adequate protection measures for trade secrets within the meaning of Section 1 b) GeschGehG. However, a precondition is that the relevant trade secrets and documents covered by the contractual provision are described more precisely.

Only general contractual provisions according to which all information and documents exchanged in the course of the cooperation between the parties shall be subject to the obligation of secrecy do not, in the opinion of the court, meet the requirements of an appropriate protective measure within the meaning of Section 1 b) GeschGehG.

In the opinion of the court, a further prerequisite is that a certain activity with regard to the protection of secrecy must result from the implementation of the existing contractual provisions. Unfortunately, what exactly the court understands by this remains unclear, but it could well be understood in the sense of a requirement for active control measures of the owner of the trade secret with regard to compliance with the contractual regulations.

Assessment of the circumstances of the individual case required

The court also points out that the question of when measures to protect business secrets are appropriate must be answered according to the specific circumstances of the individual case in the sense of a proportionality test. The court lists the following criteria as possible criteria for this purpose: value of the trade secret and its development costs; nature of the information, significance for the company; size of the company; the usual confidentiality measures in the company, the way the information is marked, contractual arrangements agreed upon with employees and business partners.

Recommendations

The decision and in particular the relatively extensive statements of the court show that there is still considerable uncertainty in answering the question which measures have to be taken in order to provide adequate protection for trade secrets within the meaning of Sec. 1 b) GeschGehG. In particular, if confidentiality agreements have not yet been revised after the GeschGehG came into force, the court’s comments on the problem of a definition of the subject of protection being too broad and vague should be taken into account. Here, care should be taken to ensure that the relevant clauses are made correspondingly concrete – for example, by means of dynamic references. In addition, it is recommended that the relevant documents and information in which the trade secrets to be protected are embodied be clearly marked accordingly.

In addition, contractual provisions for the protection of trade secrets should always be only one component of a more comprehensive secrecy protection concept, which also includes technical and organizational protection measures as well as a categorization of trade secrets and their level of protection.