Protection of trade secrets – first practical experiences with the German “GeschGehG”

The German “Law on the Protection of Business Secrets” (“Gesetz zum Schutz von Geschäftsgeheimnissen“, “GeschGehG“) entered into force on 26 April 2019. With this law, the German legislator has implemented the so-called “Know How Directive” of the European Union into German law (with a delay of more than three quarters of a year) and thus, on the one hand, has extended this legal institution, which has so far been predominantly regulated in the secondary criminal law provisions of Sections 17 to 19 UWG (“Gesetz gegen den Unlauteren Wettbewerb“, German Act against Unfair Competition), in particular under civil law, and, on the other hand, replaced the above-mentioned provisions of UWG by an independent set of regulations.

Initial practical experience indicates a considerable paradigm shift in this area, as the following aspects show.

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The German economy in October 2019 – against all odds…

… seems to be an appropriate title for this month monthly: Given the last minute’s escape from a “technical recession”, combined with the latest data, last month’s asssessment that a plateau to the recession might be nigh (cf. here), is actually supported. However, some crucial facts and my gut-feeling (sorry, this is not really scientific, I know) point in another direction. But, hey, let’s look into the German economy in some more detail:

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EU: “Preventive Restructuring Mechanism” – positions are taken*

“Be careful with what you choose,
you may get it”

Colin Powell

The deadline for the legislator to implement the EU “Restructuring Directive” is 17 July 2021 (see for further background information to the Directive here (in German)). However, The Ministry of Justice will most probably not publish the (German) draft bill originally expected for the end of this year, which should also take into account the consequences of the ESUG evaluation (see here for more details (in German)), until the spring of next year. Meanwhile, however, various associations have been very active and have, in some cases, developed concrete proposals as to how they believe the implementation into German law should take place. A look outside the box shows that the Dutch, for example, are already much further along in implementing the directive – and are likely to set completely different priorities than the German position papers suggest.

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BMJ presents Draft Bill on Criminal Law for Enterprises

Implementing the corresponding agreements in the coalition agreement (see already here), the Ministry of Justice (“BMJ“), after a number of disputes (cf. here for more details (in German)), has now submitted the expected draft bill (“Ref-E“) of the “Act to Combat Corporate Crime” (“Gesetz zur Bekämpfung der Unternehmenskriminalität”) on 22 August 2019, the core of which is the “Association Sanctions Act” (“Verbandssanktionengesetz” or “VerSanG“). The draft is now to go through the usual coordination processes in the various inter-governmental departments before it is published. However, the draft is already circulating in various committees, so that specialist media at least feel obliged to comment on it (see only here at “Juve” (in German)), whereby critical voices far outweigh positive ones. In the following, the first findings shall therefore be summarized:

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The German economy in August 2019 – downhill we go…

As a blogger-colleague colourfully pointed out recently, if people in the locker-room of a swimming pool start to talk about “recession” and “inverted yield curve”, the recession “is mainstream”. Accordingly, even German forecasting instutions, rather (in)famous for not spotting recessions correctly, are at least now considering an – albeit short – recession for Germany (namely, the “Institut für Weltwirtschaft” (IfW), cf. here). Hence, the question is not, if and when the crisis will hit the German economy (as asked last month, here), but how hard and how long the impact will be and last. And this is a rather difficult question. But, let’s look into it in some more detail:

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Receivables management – before you get “on the high seas”

Seemingly, the worsening economic situation (see only here) is already leading to poorer payment morale. For an entrepreneur, however, it helps little to complain about the general “moral decline” (as is done here (in German)). Rather, you should proactively take action well before a possible default in order not to fall victim to the (very German) motto “in court and on the high seas one is in God’s hands” or even to become a candidate for one of the notorious “domino insolvencies” yourself if a large customer falls into insolvency. Over the past twelve months, I indeed noticed an increase of requests to consult on how to react to outstanding payments – right up to being instructed to plan and implement a complete receivables management system. Enough reason to sum-up all the bits and pieces in one post.

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