GERMANY Trends and Developments Contributed by: Thomas Nägele, Simon Apel, Jonathan Drescher and Alexander Stolz, SZA Schilling, Zutt & Anschütz
information has commercial value can only ever be answered on a case-by-case basis. In a deci - sion by the Higher Administrative Court of the Federal state of North Rhine-Westphalia, the Court established the rebuttable presumption that trade secrets that are older than five years are presumed to be no longer confidential and require separate evidence of their continued economic value. There are considerable argu - ments against this approach, so it remains to be seen whether this interpretation of the TSA will become established in case law. Appropriate Confidentiality Measures Information can only be protected as a trade secret under German law “if it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret” . This means that in the event of a legal dispute, the owner of a trade secret must prove that appropriate security measures to protect confidentiality were taken with regard to the secret in question. However, neither the TSA nor the underlying ETSD provide an answer to the question of what is “appropriate” in this context. In light of this legal uncertainty, it does not come as a surprise that by far the largest portion of court decisions issued since the TSA came into effect – and most scholarly contributions on the subject of trade secret protection – dealt with the issue of appropriate confidentiality measures. One of the most detailed decisions concerning this issue was issued by the Schleswig Higher Regional Court in 2022. In this decision, the Court evaluated the underlying legal acts, the official rationale by the German government and scholarly contributions, and found that “adequate” protection does not require the best possible protection. Rather, the type and scope
of measures depend on the significance of the information for the company. This approach has now become standard in case law as more and more courts follow it. As such, the Schleswig Higher Regional Court referred to a three-level classification, distinguishing between top secret (the “crown jewels” of information, the disclo - sure of which would threaten the existence of the company), important information (the disclosure of which could cause a permanent economic disadvantage) and sensitive information (the disclosure of which could cause a short-term economic disadvantage). After having determined the level of secrecy for the information in question, the Schleswig Higher Regional Court discussed whether the measures taken by the owner of the secret were appropriate. Since only trade secrets of relative - ly minor importance, which were created as a result of a one-off incident, were affected in the case, minor secrecy measures were deemed to be sufficient for trade secret protection, such as TLS email encryption and an appropriate selec - tion of the group of knowledge persons (a “need to know” basis). As the owner had provided such measures, the information was considered a trade secret. The fact that the non-disclosure agreement may have been invalid made no dif - ference, because the court also found that the ineffectiveness of a confidentiality clause does not automatically rule out the protection as a trade secret if other protection instruments com - pensate for this omission. In 2023, the Higher Regional Court of Dresden emphasised that protective measures need not only prevent unauthorised access from the outside, but that measures with respect to the company’s own employees are also necessary. According to the Baden-Württemberg Higher Labour Court, technical organisational precau -
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