GERMANY Law and Practice Contributed by: Thomas Nägele, Simon Apel, Jonathan Drescher and Alexander Stolz, SZA Schilling, Zutt & Anschütz
non-disclosure agreement (NDA) before shar - ing any confidential information is usually the minimum of adequate protection of secrecy. • Thirdly, applying the “need to know” principle, employees or third parties should only have access to the confidential information they need to fulfil their contractual obligations or exercise their rights. • Fourthly, technical and organisational protec - tion measures may be required, which can range from simple password protection to firewalls, encryption and complex security systems. • Fifthly, every company will have to consider whether and to what extent each employee should be given the opportunity and the authority to store company information on their own data carriers or to use their own computer in their office at home. Furthermore, it is safe to assume that large com - panies or companies with numerous and valu - able secrets will be subject to stricter require - ments than small and medium-sized enterprises. While more and more court decisions regarding the question of how much effort is required for qualifying the steps taken as the required level of reasonableness have already been rendered, this question will ultimately have to be decided by the CJEU (for best practices, see 3.1 Best Practices for Safeguarding Trade Secrets ). 1.6 Disclosure to Employees In general, the disclosure of a trade secret to employees does not affect the availability of legal protection for the trade secret, as long as the employee is under an obligation of secrecy. In most cases, such an obligation to secrecy can be derived from the individual’s employment contract.
However, there is a strong opinion in German legal literature that the secrecy measures neces - sary to classify information as a trade secret are not met if employees are not expressly informed of their duty of confidentiality and sign a con - fidentiality agreement (ideally with a contrac - tual penalty) – with the consequence that there would be no trade secret to begin with. As some of the first courts seem to follow this view, it is strongly recommended to conclude appropriate NDAs (this also applies to third parties who get access to trade secrets; see 1.5 Reasonable Measures ). 1.7 Independent Discovery In principle, neither independent discovery nor reverse engineering has any impact on the exist - ence of trade secret protection. The right in a trade secret under the TSA is not an exclusive right, so parallel ownership by several entities is possible. While the owner of a trade secret cannot pre - vent third parties from independent discovery or reverse engineering (and consequently cannot prevent the third party from using or licensing the secret), this does not affect the existence of the secret itself as long as the third party does not disclose it publicly. If, however, the third par - ty makes the secret publicly known, the protec - tion for all other owners also lapses. 1.8 Computer Software and Technology There are no protections in German law that are unique to computer software and/or technology with regard to trade secrets. There are some pro - visions regarding data protection, the integrity of electronic data, copyright protection of comput - er software or telecommunications secrecy that may also apply in the case of breach of a trade secret. However, it should be noted that these regulations only provide legal protection in their
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