Trade secrets are among a company’s most valuable assets. Whether proprietary formulas, manufacturing processes, or strategic business plans, confidential information often forms the core of a company’s success. If it is disclosed or used without authorization, there is a risk of significant financial damage and lasting reputational harm.
The threat does not come solely from outside: Employees in particular often have access to sensitive information—and breaches originating from within the company itself are not uncommon. This makes proactive legal protection all the more important. Our corporate law attorneys provide comprehensive advice to companies on protecting their trade secrets and represent affected firms in cases of breaches quickly, discreetly, and effectively.
What Qualifies as a Trade Secret Under German Law?
The protection of trade secrets in Germany is regulated by the German Trade Secrets Act (GeschGehG), which was enacted to implement EU Directive 2016/943. This Act establishes the legal framework for safeguarding confidential business information, underscoring the importance of maintaining secrecy to preserve a competitive edge.
For information to qualify as a trade secret under the law, it must meet specific criteria:
- It must not be widely known or easily accessible within the relevant business circles.
- Its secrecy must provide a competitive advantage that gives it economic value.
- The legitimate owner must have implemented appropriate measures to maintain its secrecy, such as through non-disclosure agreements (NDAs) or restricted access protocols.
- The trade secret holder, who is any natural or legal person lawfully controlling the trade secret, has the right to prevent others from unlawfully obtaining, using, or disclosing the trade secret. In cases of infringement, the holder can seek legal remedies, including injunctions to halt the unlawful use and claims for damages.
Trade Secret Theft and Misuse in Germany: How Infringements Occur
Theft, Hacking and Espionage: External Attacks and Insider Threats
One of the most serious forms of trade secret infringement involves the unlawful acquisition of confidential information through theft, corporate espionage, or hacking. These threats can originate both from outside and within the organisation. Externally, competitors may directly access a company’s systems without authorisation, employ technical means to intercept communications, or use social engineering to extract sensitive data. Internally, employees or contractors with system access may exploit their position to steal or leak information — whether for personal gain or on behalf of a third party. Such conduct constitutes a violation of Section 4 GeschGehG and can give rise to both civil claims and criminal prosecution.
Employee and NDA Breaches
Internal misuse by employees represents one of the most common sources of trade secret infringement. This can occur when an employee who has legitimate access to sensitive information — as part of their role — intentionally or negligently shares it with unauthorised parties. Breaches of confidentiality agreements (NDAs) are particularly prevalent when an employee leaves the company and subsequently uses the information in a new role or for personal gain. Such conduct can result in civil claims for damages as well as criminal liability, depending on the nature and severity of the breach.
Third-Party and Contractor Misuse
Not all infringements involve outright theft. Contractors, business partners, and other external parties who have been granted legitimate access to confidential information may equally infringe trade secrets by using or disclosing that information beyond the agreed terms. This form of infringement is particularly difficult to detect, as the initial access was lawful — making clear contractual provisions and access controls all the more important.
Secondary Infringement and Secondhand Liability
Under Section 4 (3) GeschGehG liability is not limited to those who directly acquired the information unlawfully.
Anyone who obtains a trade secret “secondhand” — and knew, or should have known, that the source unlawfully disclosed it — can equally be held liable. This applies in particular to companies that manufacture, import, or distribute products based on stolen trade secrets. Claiming ignorance of the illegal origin is unlikely to constitute a valid defence under German law.
It should be noted that individuals who can invoke one of the statutory exceptions under Section 5 GeschGehG — which permits certain uses or disclosures under specific circumstances — do not qualify as infringers within the meaning of the law.
Proceedings in Trade Secret Cases in Germany
In trade secret disputes governed by the German Trade Secrets Act (GeschGehG), legal proceedings are carefully structured to protect the confidentiality of the information involved. According to Section 16 (1) GeschGehG, the court of first instance has the authority, upon request from one of the parties, to classify all or part of the disputed information as confidential if it qualifies as a trade secret. This ensures that the specific trade secret in question is not publicly disclosed during the proceedings. As a result, sensitive information contained within the case files is only made available to third parties in a redacted form, as stipulated by Section 16 (3) GeschGehG. This approach is designed to prevent further exposure of the trade secrets while the legal dispute is resolved.
Potential Criminal Consequences in Trade Secrets Cases
Regarding criminal consequences, the GeschGehG outlines severe penalties for those who unlawfully obtain, use or disclose trade secrets, and these apply to certain aggravated cases. In such cases, Section 23 GeschGehG provides for imprisonment of up to three years or a fine for individuals who engage in such activities to promote their own or a third party’s competition, for personal gain, or with the intent to harm the business owner. In particularly serious cases, such as those involving commercial-scale offences, the penalty can increase to imprisonment for up to five years, as specified in Section 23 (4) GeschGehG. Criminal prosecution in these cases typically requires a criminal complaint (Strafantrag) by the victim. However, the prosecuting authority may choose to intervene ex officio if there is a significant public interest in pursuing the case, as noted in Section 23 (8) GeschGehG.
Criminal investigations related to trade secret breaches can often run parallel to civil proceedings, with evidence gathered during criminal investigations potentially supporting the civil case. For example, house searches may be conducted as part of the criminal investigation to secure crucial evidence, such as documents or digital records. These searches require a court order and are typically carried out when there is suspicion of a trade secret breach and it is believed that evidence might be found on the suspect’s premises. The evidence obtained during these searches can be pivotal, as it may also be used in parallel civil proceedings to strengthen the injured party’s claim for damages or other remedies under civil law. However, it’s important to note that evidence obtained in criminal proceedings does not automatically become admissible in civil proceedings. The civil court must assess the admissibility separately, especially if the evidence was gathered under strict procedural conditions.
Consequences Under Civil Law for Infringing Trade Secrets
In the context of trade secret infringements, civil law provides a range of legal remedies to protect the rights of the trade secret holder and to address the harm caused by the breach.
Warning Letters
A crucial initial step in many cases is issuing a warning letter. This letter serves as an out-of-court notice to the infringer, drawing attention to the unlawful act and demanding that they cease and desist from further violations. The warning letter typically outlines the nature of the infringement and requests the infringer to issue a cease-and-desist declaration. Often, this declaration includes a penalty clause, which commits the infringer to pay a contractual penalty if the infringement is repeated. In some cases, the infringer may also be required to cover the legal fees associated with the warning letter. If the infringer fails to respond appropriately or does not provide the requested declaration, the rights holder may then proceed with legal action.
Remedies | Compensation | Injunctions | Damages
Civil law offers several potential claims that the rights holder can assert against the infringer in court. These include injunctive relief, which prohibits further use or disclosure of the trade secret, and claims for damages, where the rights holder seeks compensation for the harm caused by the infringement. Additionally, the rights holder may claim restitution, demanding that the infringer return any profits obtained through the unauthorized use of the trade secret. Another critical remedy is the destruction or surrender of materials containing the confidential information, ensuring that the infringer no longer possesses the trade secret.
A temporary injunction is another powerful tool available under civil law. This legal measure allows for swift action to prevent the further use or disclosure of a trade secret. To obtain a temporary injunction, the applicant must demonstrate an urgent need for immediate protection, providing credible evidence that an infringement has occurred and that irreparable harm is imminent without the injunction. Temporary injunctions require a credible demonstration of urgency. German courts tend to reject injunctions if the applicant has delayed too long after discovering the infringement. If the infringer ignores the injunction, they may face fines or additional legal consequences.
Combining Civil and Criminal Proceedings
Strategically, civil law measures are often used in conjunction with criminal law actions to mount a comprehensive response to the infringement. For example, the timing of issuing a warning letter, filing for a temporary injunction, and pursuing criminal charges can be coordinated to maximize impact, particularly in preserving evidence and preventing the further spread of trade secrets. By combining civil and criminal actions, the rights holder can effectively protect their interests and mitigate the damage caused by the unlawful disclosure or use of their confidential information.
Taking Action Against Trade Secret Infringement in Germany: Legal Options
Whether you are facing an active breach, seeking to strengthen your preventive measures, or navigating ongoing litigation, our team provides comprehensive legal support at every stage of a trade secret dispute.
Litigation Support
Regarding litigation, our team stands ready to represent you in court, whether you are pursuing a claim against an infringer or defending against accusations of infringement. We have extensive experience in German courtrooms. We will thoroughly prepare your case by establishing the necessary proof that your information qualifies as a trade secret, that appropriate protective measures were in place, and that an infringement has occurred. Our goal is to secure the best possible outcome for you, whether through injunctive relief, claims for damages, or other legal remedies available under civil law.
Preventative Steps | NDAs | Internal Mechanisms
Beyond litigation, we also focus on preventive measures to protect your trade secrets proactively. We can assist in drafting and reviewing non-disclosure agreements (NDAs) and other contractual protections to ensure your confidential information remains secure. Our legal team works closely with you to implement robust protection strategies, including technical safeguards and employee training programs, designed to prevent unauthorised access and breaches. By fostering a strong culture of compliance within your organisation, we help you minimise the risk of trade secret violations before they occur.
Crisis Management
Schlun & Elseven Rechtsanwälte provides immediate and effective crisis management support in the event of a breach. We understand the urgency of responding to such incidents, and our team is equipped to act swiftly to mitigate damage, whether through the courts or negotiated settlements. We coordinate closely with you to ensure that all legal avenues are explored to protect your interests and to secure the necessary evidence to support your claims in any subsequent legal action. Our approach combines strategic planning with decisive action, ensuring that your business can recover and continue to thrive even in the face of serious challenges.
Schlun & Elseven: Our Services for Protecting Your Trade Secrets
Protecting trade secrets requires both proactive prevention and decisive action in the event of an emergency. Our attorneys support companies at every stage: We develop preventive strategies, advise on non-disclosure agreements and compliance programs, and assist in identifying and documenting violations. If a conflict arises, we consistently enforce your rights—through cease-and-desist letters, injunctions, claims for damages, and, if necessary, in court. Trust a law firm that understands your interests and represents them with experience and determination. Contact us today—we’ll advise you confidentially, quickly, and effectively.
Trade Secret Protection in Germany: Frequently Asked Questions
A trade secret, as defined by the German Trade Secrets Act (GeschGehG), is information that is not generally known or accessible, has economic value due to its confidential nature, and is protected by appropriate safeguards, such as non-disclosure agreements or access restrictions. Typical examples include manufacturing processes, customer lists, price calculations, and business strategies.
Affected companies have both civil and criminal remedies available. Under civil law, options include a warning letter with a cease-and-desist demand, a preliminary injunction, and claims for damages. At the same time, filing a criminal complaint may be advisable, as prosecutors have extensive investigative powers, including the authority to conduct searches to secure evidence.
Under Section 23 of the Trade Secrets Act (GeschGehG), imprisonment of up to three years may be imposed for basic offenses, such as when an employee discloses trade secrets during the employment relationship. In cases involving aggravating circumstances, such as acting for commercial gain or disclosing information abroad, the maximum penalty increases to five years. Even an attempt to commit such an offense is punishable.
No, the duty of confidentiality remains in effect even after the employment relationship ends, provided the information constitutes genuine trade secrets. Any former employee who uses or discloses confidential information at their new employer violates the GeschGehG and may be subject to both civil and criminal liability.
No, an NDA is not always a mandatory requirement. The Trade Secrets Act merely requires “reasonable confidentiality measures” without prescribing a specific form. Whether an NDA is necessary – and whether it is sufficient on its own – depends on the individual case. For particularly sensitive information, an NDA alone will generally not suffice; in such cases, supplementary measures such as technical access restrictions, internal guidelines, or other confidentiality clauses in the employment contract are necessary. In other cases, such measures may be sufficient on their own without the need for a separate NDA. The decisive factor is always that the protection must be deemed appropriate in the specific individual case.
Practice Group: German Contract Law
Practice Group:
German Contract Law
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