10-29-2018  | Protection of Trade Secrets

September 2018: The German Federal Court of Justice takes the protection of trade secrets seriously!




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The German Federal Court of Justice took the opportunity to clarify important questions relating to the protection of trade secrets. It elevated the relevant March 22, 2018 ruling, Case BGH I ZR 118/16, to the rank of a guiding principle decision and published the grounds for the ruling on the Federal Court of Justice’s website on September 28, 2018.

The clear and unequivocal statements of the competent Civil Panel I amount to the following: trade secrets are to be taken seriously, and courts may not unnecessarily complicate the enforcement of claims because of their infringement. This relates to the old German legal status, thus even prior to EU Directive 2016/943 entering into force. The trend will become even more pronounced with the application of the Directive and its transposition: it is no longer a trivial offense to disregard the protection of secrets, but has considerable consequences.

Such was the course of the proceedings: Koblenz Regional Court had upheld the complaint, but Koblenz Higher Regional Court overturned the decision and dismissed the complaint. The Federal Court of Justice referred the matter back to Koblenz Higher Regional Court with the aforementioned clear notes. It remains to be seen how Koblenz Higher Regional Court will decide in this specific case. Nevertheless, the effects of the Federal Court of Justice’s general statements will be felt far beyond the individual case. In the future, this judgement will play a key role in almost all cases involving the protection of trade secrets. The full text of the grounds for the judgement can be found here: BGH I ZR 118_16, with an English translation (unofficial, arranged by us) here: BGH I ZR 118_16 English translation.
 
We anticipate this judgement to be taken into account outside Germany as well. After all, it is an international trend that trade secrets are protected more consistently in the EU on the basis of Directive 2016/943, in the U.S. under the DTSA, the “Defend Trade Secrets Act of 2016,” and in numerous other countries under similar laws and consistent judgements.

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