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Perspectives

ReferenceInternational Business Law

Effective protection of trade secrets

Requirements for confidentiality measures and the burden of pleading and proof in trade-secret cases, with notable rulings on catch-all employment clauses.

Peter Poleacov (updated )11 min

A laptop showing program code on screen, a smartphone in a stand beside it

Background

On 26 April 2019, the German Trade Secrets Protection Act (Gesetz zum Schutz von Geschäftsgeheimnissen, GeschGehG) entered into force. It transposed Directive (EU) 2016/943 on the protection of trade secrets against unlawful acquisition, use, and disclosure into German law. Since then, several court decisions have been issued, summarized below.

What the measures actually are

Of all the requirements for protection, the company itself controls only one, adequate confidentiality measures (Section 2 No. 1(b) GeschGehG). They fall into three layers, and none substitutes for another:

  • Organizational: risk analysis and classification of information, graded access rights, internal training.
  • Technical: access controls and restrictions, encryption, IT security.
  • Legal: a non-disclosure agreement and specifically framed confidentiality clauses in employment and service contracts.

How much is needed depends on the case. According to the Higher Regional Court of Düsseldorf, the standard is objective. The statute requires neither optimal protection nor extreme security. What counts is the nature and value of the secret, its development costs, and its significance for the business. Also relevant are the size of the company, the measures customary there, how the information is marked, and the agreements in place with employees and business partners. The Higher Regional Court of Hamm adds the economic value, the competitive advantage secrecy confers, the difficulty of keeping the information secret, and the concrete exposure.

Without adequate measures, there is no trade secret and no protection under the GeschGehG. Protection concepts most often lack precisely this sentence. A concept that nobody applies is not a measure.

Case law

LAG Baden-Württemberg (8th Chamber), order of 3 July 2025 – 8 Ta 1/25

  1. A party seeking to have information classified as confidential in proceedings under Section 16(1) GeschGehG must plead all requirements, including the adequate confidentiality measures, in such a way that a trade secret is possible on the facts the party presents.

  2. Confidentiality obligations in an employment contract that do not relate to specific information but merely require silence in general terms do not amount to an adequate confidentiality measure. That confirms the Aachen line, now in an official headnote.

  3. Neither a post-contractual confidentiality obligation that is invalid under Section 307(1) sentence 1 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) nor the employee’s general ancillary duty under Section 241(2) BGB amounts to one.

  4. The technical protective measures were insufficient on the facts. The claimant’s appeal failed.

OLG Düsseldorf, judgment of 11 March 2021 – 15 U 6/20 (final)

  1. The technical information embodied in a CAD design drawing can, taken as a whole, be a trade secret. General availability is then assessed by reference to the drawing itself, not to individual devices or parts drawn in it.

  2. The standard for adequacy is objective; optimal protection is not required.

  3. Where the infringement predates the entry into force of the GeschGehG, the measures need to be in place only from its entry into force, but continuously from then on.

OLG Hamm, judgment of 15 September 2020 – 4 U 177/19

  1. An injunction under Section 6 GeschGehG is available only where adequate confidentiality measures have been taken and breaches of those measures lead to a corresponding response by the company.

  2. Measured against the significance of the secret, the company must pursue every indication of circumvention diligently and either adjust its security concept promptly or impose sanctions.

ArbG Aachen, judgment of 13 January 2022 – 8 Ca 1229/20

  1. Where at least potentially equivalent competing products are on the market and the defendant plausibly argues that competitors could have obtained the secret information through permitted reverse engineering, the claimant must plead and, where necessary, prove in substance that knowledge not known on the market underlies its products.

  2. Where the defendant denies that adequate confidentiality measures within the meaning of Section 2 No. 1(b) GeschGehG have been taken, the claimant must plead and, where necessary, prove in detail, with reference to specific information, which protective measures it has put in place to keep that information confidential.

  3. A blanket clause in the employment contract (see below) that extends to all operational information received during the employment relationship (a so-called catch-all clause) is not an adequate confidentiality measure within the meaning of Section 2 No. 1(b) GeschGehG.1

LAG Baden-Württemberg, judgment of 18 August 2021 – 4 SaGa 1/21

  1. The court held that the price calculation at issue was a trade secret under Section 2 No. 1 GeschGehG. It was protected by confidentiality measures appropriate to the circumstances within the meaning of Section 2 No. 1(b) GeschGehG. The claimant had implemented, among other things, a concrete IT policy, a need-to-know principle, and a corporate compliance system. The claimant had also used a contractual clause by which the defendant (a compliance officer) was bound to confidentiality regarding trade secrets, including after termination. As a confidentiality measure, this clause was, in the court’s view, not too broadly framed, because “operational and trade secrets connected with the management of [name of business area] and with confidential matters of the management board and the senior management” were expressly identified.

  2. An interim injunction prohibiting the use of a trade secret is unavailable for lack of a risk of first commission or repetition where the defendant’s affidavit establishes that the defendant no longer holds the trade secret.2

Practice notes

  • A pre-formulated catch-all clause is invalid if it binds the employee, beyond the end of the employment and without any time limit, to silence on all internal matters.3 For the time after the employee leaves, the employer can at most bind them to confidentiality on individual, specifically identified trade secrets, and only where the employer’s interest in secrecy prevails.4 The Higher Labor Court of Cologne and the Labor Court of Aachen also require a statement of how long the secrets are to remain protected.5 In the employment contract, therefore, name the individual trade secrets that are to stay confidential after the employee leaves, and set how long. To stop a former employee from using their knowledge for a competitor, you need a post-contractual non-compete with compensation that the employer pays for the duration of the restriction (Karenzentschädigung).

  • In a dispute, the claimant bears the burden of pleading and proof for the existence of a trade secret and the implementation of adequate confidentiality measures.

  • According to the Labor Court of Aachen, the claimant’s submissions on the adequacy of confidentiality measures must not be confined to generic descriptions of the overall protection level. They require a detailed account of the specific measures taken (trade-secret management), with particular focus on the specific information at issue. Beyond a list of measures, the claimant must describe specifically how those measures protect the information at issue.

  • Measures have to be adopted and enforced. According to the Higher Regional Court of Hamm it is not enough to introduce them. A company that fails to pursue indications of circumvention diligently, or responds to them with neither an adjusted security concept nor sanctions, loses its injunctive relief. The standard is the significance of the secret. The protection concept therefore needs an owner, a record of incidents, and a response that can be evidenced later.

The new leak is AI

Today, a company loses a trade secret fastest not through a departing employee but through an entry in an AI tool. According to press reports, employees at Samsung entered internal data into ChatGPT in spring 2023, putting the information onto someone else’s servers. In May 2023 the company temporarily banned generative AI tools on company devices. Several large corporations have issued comparable bans.

There is also the US CLOUD Act (18 U.S.C. § 2713). Under it, US providers must disclose stored data when ordered by an authority or a court. This applies even where the data is stored outside the United States.

For the protection concept, that means a module of its own:

  • Use business accounts with established providers only, no third-party apps and no browser extensions.
  • No information classified as confidential in prompts.
  • A clear policy on the use of AI tools at work, with regular training.
  • Monitor access and unusual activity.

What your counterparty may do with the data you hand over is the other side of the same question; I address it in the article “Data and AI in contracts: what may your counterparty do with your data?”.

In litigation: the new Section 273a ZPO

The secret also needs protection in the lawsuit. Enforcing a secret in court means disclosing it. Civil proceedings are public in principle (Section 169 of the German Courts Constitution Act, Gerichtsverfassungsgesetz, GVG). Because of this contradiction, companies spent years taking commercial disputes to arbitration, where proceedings are confidential. State courts did offer some protection before. A court may exclude the public where an important trade secret is discussed and public discussion would harm overriding interests worthy of protection (Section 172 No. 2 GVG). A labor court may do so on a party’s application alone where trade secrets become the subject of the hearing (Section 52 of the German Labor Courts Act, Arbeitsgerichtsgesetz, ArbGG). The court can then oblige those present to keep the matter confidential (Section 174(3) GVG).

Until 2025 the GeschGehG helped only in a few kinds of proceedings. They included trade-secret proceedings and, by cross-reference, patent and utility model proceedings (Section 145a of the German Patent Act (Patentgesetz, PatG); Section 26a of the German Utility Model Act (Gebrauchsmustergesetz, GebrMG)). On a party’s application, the court may classify the information at issue as confidential in whole or in part. The condition is that it may be a trade secret (Section 16(1) GeschGehG). Everyone involved in the proceedings must then treat it as confidential. Outside court proceedings, they may neither use nor disclose it, unless they learned of it elsewhere (Section 16(2) GeschGehG). Both duties outlast the proceedings. They end only when the court denies the trade secret by final judgment or the information becomes known or readily accessible in the relevant circles (Section 18 GeschGehG). Third parties get access to the file only in redacted form (Section 16(3) GeschGehG). For breaches, the court may, on a party’s application, impose a fine (Ordnungsgeld) or detention (Ordnungshaft) (Section 17 GeschGehG). The classification alone does not exclude the public from the oral hearing; Section 19 GeschGehG provides for further applications to that end.

With the Act to Strengthen Germany as a Place of Justice (Justizstandort-Stärkungsgesetz), these instruments (Sections 16 to 20 GeschGehG) have been available in all civil proceedings since 1 April 2025. The basis is Section 273a of the German Code of Civil Procedure (Zivilprozessordnung, ZPO). The court decides on the application by order. As a rule, it hears the other side only afterwards. The classification can be challenged only together with the appeal on the merits.

Filing the application does not make up for what was neglected earlier. For classification under Section 16(1) GeschGehG, the Higher Labor Court of Baden-Württemberg requires the party to plead all requirements, including the adequate confidentiality measures. A trade secret must be possible on the facts the party presents. Whoever failed to take adequate measures therefore fails with the very application meant to protect the secrets.

Notes

  1. Likewise LAG Düsseldorf, judgment of 3 June 2020 – 12 SaGa 4/20. ↩

  2. Likewise LAG Rheinland-Pfalz, judgment of 25 January 2021 – 3 SaGa 8/20. ↩

  3. BAG, judgment of 17 October 2024 – 8 AZR 172/23, headnote 2, in the ArbG Aachen case; likewise, in interim proceedings in the same dispute, LAG Köln (2nd Chamber), judgment of 2 December 2019 – 2 SaGa 20/19; Fuhlrott/Fischer, NZA 2022, 809 (812); Hauck, GRUR 2022, 530 (535); going further, for every catch-all clause, Hoeren/Münker, MMR 2021, 523 (524), and Holthausen, NZA 2019, 1377 (1380). ↩

  4. BAG, judgment of 17 October 2024 – 8 AZR 172/23, para. 37. ↩

  5. LAG Köln (2nd Chamber), judgment of 2 December 2019 – 2 SaGa 20/19; ArbG Aachen, judgment of 13 January 2022 – 8 Ca 1229/20. ↩

Reference: Poleacov, P. (2026). Effective protection of trade secrets. INN.LAW. https://inn.law/en/perspectives/protection-trade-secrets/