GERMANY Law and Practice Contributed by: Thomas Nägele, Simon Apel, Jonathan Drescher and Alexander Stolz, SZA Schilling, Zutt & Anschütz
1.11 What Differentiates Trade Secrets From Other IP Rights Protection for trade secrets differs from the other types of intellectual property protection available in Germany in many ways. The differences in the scope of protection are the most notable: while the owner of intellectual property rights is granted absolute protection and may prohibit third parties from using and exploiting the protected intellectual property in any way (notwithstanding statutory exemp - tions), the trade secret owner is not granted sim - ilar rights. While they may prohibit employees and contractors from using or disclosing their secrets, there is no comparable absolute pro - tection for trade secrets outside of such special contractual relationships. On the contrary, the TSA does not prohibit third parties from using trade secrets per se, but only penalises the breach of (factual) security meas - ures that its owner must actively ensure (see 1.5 Reasonable Measures ). In other words, trade secret protection exists only against the unfair disclosure of the information; if the informa - tion becomes known due to negligence in the protection of secrets, its protection is lost. This means, on the one hand, that protection is lost if the information in question becomes public (even if unlawfully) and, on the other hand, that the owner cannot take action against an inde - pendent parallel creation by third parties. Furthermore, there are significant differences regarding costs, the scope and the duration of the protection; in particular, in comparison to patents, while patent protection entails high fixed costs due to application and maintenance fees, secrecy protection entails ongoing costs. Intellectual property rights are limited to the respective legal system, whereas secrecy leads
respective areas. This protection may overlap in individual cases, but not necessarily. 1.9 Duration of Protection for Trade Secrets Trade secrets do not have a fixed or maximum term of protection: they remain protected under the TSA as long as the respective information meets the relevant requirements (see 1.4 Ele- ments of Trade Secret Protection ). As soon as the information is no longer secret, its protection is irrevocably lost, regardless of a controlled or accidental – or even illegal – disclosure. How - ever, it should be noted that “disclosure” in this regard means disclosure to the public or at least to a larger group of people that normally deal with the kind of information in question. A description of the secret in a professional jour - nal, at a trade fair or in a lecture is sufficient to trigger disclosure. By contrast, disclosure to employees and con - tractual partners will usually not affect trade secret protection as long as they are obliged to secrecy on the basis of employment contracts or by confidentiality agreements (see 1.6 Disclo- sure to Employees ). 1.10 Licensing In principle, the trade secret owner can license a trade secret like any other intellectual prop - erty right. As long as the licensee is obliged to secrecy during the term of the licensing agree - ment and afterwards (ideally with an adequate contractual penalty in the case of a culpable infringement), licensing does not affect the exist - ence of the trade secret.
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