Trade Secrets: The Necessity of Appropriate Protective Measures

If a company wishes to place its trade secrets under the protection of the Trade Secrets Act (GeschGehG), it must take appropriate measures to protect those secrets. The higher the value of the trade secret, the more effective the protective measures must be. This was decided by the Baden-Württemberg Regional Labor Court in its ruling of July 3, 2025 (Case No. 8 Ta 1/25).

Facts of the Case

The decision of the Baden-Württemberg Regional Labor Court is based on the following facts: The plaintiff employer sought, among other things, an injunction against the defendant’s anti-competitive conduct, disclosure of information, and damages. The employer accused the defendant of unlawfully using its trade secrets. During the court proceedings, the employer submitted documents that it considered to be its trade secrets and sought to have them classified as subject to confidentiality within the meaning of Section 16 of the Trade Secrets Act (GeschGehG).

The plaintiff argued that the submitted design drawings and an Excel calculation tool constituted its trade secrets. To protect them, the employer had, among other measures, included confidentiality clauses in the employment contracts and informed its employees of the need for confidentiality. Furthermore, the documents had been stored on a local server housed in a locked cabinet. A cloud storage solution had not been used for security reasons. Access to the data in question had been possible only to a limited group of individuals known by name to the plaintiff, after those individuals had logged in using their own password-protected accounts.

The defendant argued that the protection of the documents had been merely superficial. A large number of people had had access to them.

The Labor Court rejected the classification of the submitted documents as requiring confidentiality. The Regional Labor Court upheld this decision.

Reasons for the Decision

The Regional Labor Court shared the Labor Court’s view that the necessary “appropriate confidentiality measures” within the meaning of Section 2(1)(b) of the Trade Secrets Act (GeschGehG) were lacking. On the one hand, the confidentiality clauses were ineffective as so-called catch-all clauses. On the other hand, given the alleged value of the trade secrets in the millions, more extensive measures to protect the secrets should have been taken. The Regional Labor Court cited, among other things, the logging and documentation of access, the technical prohibition of using external storage media and sending files via email, the granting of access rights only on a case-by-case basis, and the use of watermarks.

Practical Guidance

Companies are well advised to protect their trade secrets through appropriate measures. Otherwise, they risk legal difficulties if injunctive relief and other claims are asserted against infringers. As the Regional Labor Court emphasizes, optimal protection is not required. However, employers should take sufficient precautions from a technical, organizational, and legal standpoint.