EU cleans up with the Trade Secrets Act! The Trade Secrets Act (GeschGehG) came into force without a transitional period!

Are our trade secrets protected by appropriate measures?

 

This is an urgent issue in the executive boards of companies!

In times of digitized work, it has become complicated to adequately protect business-critical information. Advanced digitization ensures that almost anyone can steal or misuse trade secrets. This has been identified by the EU regulators as a major corporate vulnerability.

Companies are required by law implementing Directive (EU) 2016/943 on the protection of trade secrets against unlawful acquisition, use, and disclosure to protect their non-proprietary know-how by means of confidentiality measures. In Germany, this EU directive came into force as a completely new law under the name of the Trade Secrets Act on 26.4.2019. and without a transitional period!

In this context, there are completely new requirements for companies and the management concerned, which is called upon to act!

Companies that fail to implement necessary measures automatically forgo important advantages and procedural innovations in the case law. Only those who can provide appropriate protective measures will be able to assert claims in the future as the secret holder for breach of his trade secret in court. Thus, liability issues of the management are to be reassessed in this context.

It is therefore important for companies very early to take the appropriate steps to prevent illegal access to customer data, contracts, price lists, cost and price calculations, technical drawings and plans, recipes, processes, etc., or clear guidelines in dealing to create business know-how.

INTELLIGENCE LOSS PREVENTION AUDIT [ILPA] helps to implement the Trade Secrets Act

 

With the ILPA program, which we have designed especially for this purpose, we support companies in implementing appropriate measures in order to be able to assert claims and allegations to protect their know-how, if necessary. At the core, we link the resulting economic loss to the business as well as the individual incident or chain (breach of trade secrets) that caused damage or defect. Here are some useful examples:

  • Losses in sales of the company or individual products and its impact on the substance of the company or its actual value.
  • Damage to the reputation of the company or individual products and its impact on the company's economic growth.
  • Losses on capital goods (manufactured and consumer goods).
  • Losses of investments in research and development (holistic or project-related to individual product development).
  • Losses in staff leaving together with the associated know-how.

ILPA can prove corporate status before and after an injury using digital forensics and accurately quantify the economic damage. With the submission of ILPA final reports (if desired, an archiving takes place at an independent body) affected companies can in the future claim for breach of their trade secrets by specifying loss figures.

The ILPA program focuses on the following topics:

  • The total inventory of a company regardless of its size and complexity, including fixed assets (property, plant and equipment and intangible assets).
  • Creating cartography of trade secrets distributed throughout the company. This includes an overall inventory and a holistic view of business-critical know-how.
  • A check on access and requests by business units, departments and the workforce to confidential information. Derivatives get into a new set of rules. Included is a classification of information, necessary entry requirements, and new access controls.
  • The control of all knowledge, information and data transfers between companies requiring a possible confidentiality agreement or a revision or extension of existing contractual agreements.
  • An investigation of all physical access to the classified information to introduce or extend electronic safeguards.
  • Awareness of the workforce and their required training.

The ILPA program includes the use of self-learning algorithms. These allow a scope of services that goes well beyond a traditional IT audit, especially the critical core concerning the protection of trade secrets. Depending on the level of expansion, the ILPA program can be rolled out to specific business areas within the company or to the entire group. The duration or intensity of our service depends on an agreement with the client.