As is well known, requests for information under the IFG are not exactly popular with government agencies and other bodies. One of the most common grounds for denial is the claim that the request conflicts with a third party’s trade or business secrets. However, this argument is misguided if the authority itself has collected information about a third party’s products, for example, as part of market surveillance. When the law is applied correctly, this information belongs to the authority itself, not to third parties.
Legal Framework: Relationship Between the IFG and the GeschGehG
In 14 federal states in Germany as well as at the federal level, a Freedom of Information Act (IFG) governs an unconditional right of access to official information held by state or federal authorities. The arguments used by authorities to deny access to information despite the clear legal situation are varied and, at times, quite creative. Fortunately, however, in most cases these arguments are rejected by the administrative courts (overview here).
With minor variations, all IFG claims include the restriction that the right to information must not lead to the disclosure of trade or business secrets: According to Section 6, Sentence 2 of the Federal IFG, access to such secrets may only be granted with the consent of the party concerned. Thus, from the outset, the authority cannot decide to the contrary. Section 8 of the IFG NRW does, at least, allow for the disclosure of information if there is an overriding interest in granting access to the information and any potential harm is only minor.
These reservations are, in principle, reasonable and appropriate, as authorities frequently obtain trade secrets in the course of their work, and these should not be disclosed through requests under the IFG. However, the authorities’ application of this provision often reflects a fundamental lack of understanding of the GeschGehG, which is also relevant to the interpretation of the IFG provisions.
Case Study: Analysis of construction products by the authority
A market surveillance authority, such as the German Institute for Building Technology (DIBt), conducts certain investigations into the material properties of construction products within the scope of its jurisdiction. These investigations are triggered by reasonable doubts as to whether the construction products actually possess the properties described in advertising and CE certification. The DIBt therefore purchases certain construction products from a manufacturer, has them delivered to a laboratory, and has them analyzed there. Based on these results, the DIBt then makes a decision.
Another manufacturer of construction products now learns of the DIBt’s investigations and requests access to the results of the investigations commissioned by the DIBt under the IFG. The authority refuses to disclose the results, stating that they constitute trade and business secrets of the product manufacturer.
What is the legal situation?
Applicability of the Definitions in the GeschGehG to the IFG
First, the authority will have to accept that the term “trade and business secrets” must be interpreted in light of the GeschGehG.
As is well known, Section 2 no. 1 GeschGehG contains a legal definition of the term “secret” which – and this is crucial – also applies in public law (as expressly stated by the Federal Administrative Court [BVerwG], decision of March 5, 2020, Case No. 20 F 3/19, NVwZ 2020, 715, 716, and here). The opposite applies only if public law contains a different definition of a secret. As far as can be seen, this is not the case in any Freedom of Information Act (IFG). The statutory definition in Section 2 no. 1 GeschGehG therefore decisive for all state IFGs as well as for the federal IFG.
No Legitimate Interest in confidentiality for defective products
A prerequisite for classifying the test results as a trade secret of the manufacturer would first require a legitimate interest in confidentiality on the part of that company (Section 2 no. 1 (c) of the GeschGehG).
This legitimate interest may exist, in principle, if the information is capable of weakening the manufacturer’s competitive position. However, the legitimate interest also requires that the underlying information not be disapproved of by the legal system. Neither the GeschGehG nor the IFG recognizes a legitimate interest in confidentiality if that interest conflicts with the legal order. Therefore, if the test results indicate that the product in question was defective and should not have been placed on the market, there is likely no legitimate interest in confidentiality.
Ownership of Trade Secrets: Government agency or manufacturer?
However, another question is even more intriguing: Is this even a trade secret of the manufacturer?
According to Section 2 No. 2 GeschGehG, the owner of a trade secret is the party that has lawful control over the secret. This, in turn, is the person or entity that generated or created the information itself. Ownership, however – unlike in the case of copyright – is not the result of an act of intellectual creation. Rather, the person or entity that is authorized to use the information and exercise control over it becomes the owner of the information. The owner must have the ability to determine, restrict, or deny access to the secret.
According to this standard, in the case of the results of investigations initiated by a government agency itself, the agency alone is the owner of the trade secret. The investigations were conducted without any involvement on the part of the manufacturer. The information originated within the sphere of the agency that commissioned and paid for the investigation. The public authority alone has the power of disposal over this information and can exercise control over it. The fact that the information relates to the products of a third party (the manufacturer) is irrelevant to this assessment. Any company is authorized to have the publicly available products of another company analyzed (Section 3(1) no. 2 (a) GeschGehG). The company that pays for such an analysis is the owner of the corresponding results—and, subject to the additional requirements of Section 2 GeschGehG, is also the holder of the trade secret. In the absence of specific statutory provisions, the same applies to the authority. The important consequence of this assessment is that the test results constitute official information just like any other. Outside the scope of the IFG, the authority cannot invoke the protection of third-party trade secrets (because, under the GeschGehG, they are not third-party secrets). The results of the authority’s own investigations are subject to the right to information under the IFG.
Conclusion: The authority’s investigation results are subject to the IFG
Defending against IFG requests for information on the grounds of alleged trade secrets has its limits. In cases where the relevant information was obtained by the authority itself, it does not constitute a third party’s trade secret but rather official information. In such cases, refusing to disclose the information is unlawful.