In its decision of September 21, 2021 (Case No. 15 W 6/21, GRUR 2022, 75 – Disclosure of Expert Opinion (not publicly available)), the Düsseldorf Higher Regional Court held that the definition of a trade secret under Section 2 (1) of the German Act on the Protection of Trade Secrets (GeschGehG) does not apply in the so-called “Düsseldorf procedure.” When assessing whether a trade secret exists on the part of the respondent and whether this justifies an interest in confidentiality, the court must instead rely on the “recognized and well-established principles of case law.”
The Düsseldorf procedure
The Higher Regional Court’s decision concerns the question of whether the applicant is entitled to receive the expert opinion following the conduct of an independent evidentiary proceeding regarding a suspected infringement of intellectual property rights (the “Düsseldorf Procedure”). As the Senate also emphasizes in the decision, the applicant – or the party entitled to inspect the evidence – is, in principle, entitled to receive the expert opinion upon completion of the inspection. This applies regardless of whether the expert opinion affirms or denies an infringement of intellectual property rights. Only if the respondent submits a substantiated argument regarding the existence of a trade secret may disclosure be precluded, and the attorneys’ duty of confidentiality toward the petitioner may remain in effect. Legal practice developed the Düsseldorf procedure long before the GeschGehG was enacted and came into force, in order to safeguard the mutual interests of the parties in the absence of a more specific legal basis (see, fundamentally, Kühnen GRUR 2005, 185).
Trade Secret
The respondent subject to an inspection has a substantial interest in preventing the disclosure of the expert report if it contains a trade secret. The decisive factor here is what requirements the court imposes on the demonstration of such a secret.
In its decision of September 21, 2021, the Higher Regional Court of Düsseldorf concluded that this question should be addressed not by referring to Section 2 no. 1 GeschGehG, but rather to the “recognized and well-established principles of case law”. The application of Section 2 GeschGehG is intended “solely for the Trade Secrets Act and thus for proceedings in which claims arising from this Act are asserted”. Outside the scope of application of the Trade Secrets Act, only an explicit reference to the legal definition in Section 2 of the Trade Secrets Act could lead to its applicability; however, such a reference is lacking in the Patent Act. Although the new provision in Section 145a PatG mandates the corresponding application of sections 16-20 GeschGehG, it does not refer to the definition. Furthermore, the independent evidence proceedings are expressly excluded from the scope of application of the new provision, as the legislature intended to adhere to the established case law regarding the Düsseldorf proceedings.
An analogous application is also ruled out due to the absence of an unintended regulatory gap.
It is noteworthy, however, that despite its narrow focus, the Senate addresses the question of whether the party obligated to allow inspection had actually taken confidentiality measures. The court also expressly leaves open the question of whether the appropriateness of the measures is a criterion for assessing the intent to maintain secrecy (within the meaning of earlier case law).
Assessment
The decision of the Higher Regional Court of Düsseldorf is unconvincing and leads to unnecessary complications. To the extent that the Senate justifies its adherence to the established concept of a trade secret by arguing that the protective purposes of the Düsseldorf proceedings, on the one hand, and the GeschGehG, on the other, are different, this is only partially correct. Rather, the Düsseldorf proceedings, with their differentiated decision regarding the disclosure of expert reports, serve precisely to protect the respondent’s trade secrets. At least in this respect, therefore, there can be no question of differing purposes of protection.
Nor does the wording of Section 2 GeschGehG (“For the purposes of this Act”) preclude its applicability. On the contrary: According to the legislature’s intent, the GeschGehG was created as a “framework law” intended to comprehensively regulate the unlawful acquisition, use, and disclosure of trade secrets. There is no apparent reason to place the respondent in an inspection proceeding in a more favorable position than other holders of trade secrets. If the party subject to the inspection cannot demonstrate adequate protective measures, its information is not worthy of protection due to its own negligence (see, regarding protective measures, here and here). The fact that the Higher Regional Court of Düsseldorf does not entirely disregard this aspect – despite references to the earlier legal situation – is ultimately demonstrated by the fact that the Senate – in this respect, departing from earlier case law – discusses the existence of protective measures when addressing the question of whether there was an intent to maintain confidentiality.
The issue brought to light by this legal dispute also arises in other cases. For example, Section 384 no. 3 of the German Code of Civil Procedure (ZPO) establishes a right to refuse to testify to protect against the disclosure of “trade secrets”. If one were to apply the Düsseldorf Higher Regional Court’s assessment to this provision, one could similarly argue that there is no explicit reference to Section 2 GeschGehG and that, therefore, an autonomous interpretation of the term must be undertaken. However, legal scholarship correctly rejects this approach and points out “that the term ‘trade secret’ at issue here can reasonably be understood to refer only to business secrets” (Müller, in: Cepl/Voß, Prozesskommentar zum Gewerblichen Rechtsschutz, 2nd ed. 2018, Section 384 ZPO, para. 10). The cited reasoning applies to all other cases in which reference is made to a secret (e.g., Section 120 of the Works Constitution Act (BetrVG), but also “confidential information and secrets of the company,” Sections 93 (1), sentence 2; 394, sentence 2; 404 of the German Stock Corporation Act (AktG), and numerous other provisions). Overall, all legal provisions that refer to a “trade and business secret” (or, using even more outdated terminology, a “trade secret”) should be interpreted uniformly.
Conclusion
The ruling by the Higher Regional Court of Düsseldorf exemplifies many still unresolved questions regarding the current and future application of the GeschGehG and its limitations. However, given that protection of trade secrets has long been insufficiently developed, it would be disastrous not to apply the newly created legal framework uniformly, as long as the legislature does not expressly provide for a deviation.