Article: “EU Know-how directive – Impact on M&A Transactions” by Hermann Knott
“Companies must protect their capital in the form of business and trade secrets from being lost to the competition. In Germany there has been no uniform law for the protection of trade secrets up to now. Rather, the provisions for the protection of trade secrets result from the criminal offences of Secs. 17 through19 UWG (German Act against Unfair Competition) as well as the claims under tort law and injunctive relief (Secs. 823, 826 BGB and Sec. 1004 BGB (German Civil Code)). The protection of trade secrets provided for in these scattered provisions is considered insufficient.3 An important reason for this is that the owner of the secret finds himself in the dilemma as to whether he describes the infringed trade secret in detail as part of the necessary substantiation of his claim, without being able to ensure that the court prohibits the defendant or third parties and thus his competitors from exploiting these details for their own purposes, or whether he does not do so and thus risks losing the case.
In light of this insufficient protection of trade secrets which are not protected as patents or under copyright laws, the European Parliament has adopted the Directive (EU) 2016/943 (dated June 8, 2016, the “Know-How Directive”) regarding the protection of Know-how and confidential business information. All member states of the EU are now obliged to implement the provisions of the Directive.”
By Hermann Knott
Published at Revista de Direito Comercial, 12-03-2019.