Germany recently adopted new legislation governing trade secret protection. The “Gesetz zum Schutz von Geschäftsgeheimnissen” (or Trade Secrets Act) implements European Union Directive 2016/943, which is intended to harmonize trade secrets law across the European Union. While many of the core provisions of the Trade Secrets Act will be familiar to practitioners of U.S. trade secrets law, they are new to Germany. For example, German law did not previously define what constitutes a protectable trade secret. The Trade Secrets Act now clarifies that both technical know-how (such as specifications, designs, and manufacturing methods) and business information (such as customer and market data) could potentially qualify as a trade secret. Similarly, the Trade Secrets Act also imposes obligations on trade secret owners to implement actual and reasonable measures to maintain the secrecy of asserted trade secrets. No such requirement existed under prior law. The new Trade Secret Act also affirmatively allows competitors to reverse engineer trade secrets, so long as doing so is not prohibited by contractual obligations among parties. Given these and other significant changes, companies doing business in Germany may need to update their best practices for trade secrets to ensure continued protection.
