It was an ambiguous moment for a US technology giant in 2018: It had been ordered to stop selling certain products in Germany, as the court held it infringed on a competitor’s patent on a chip. But it managed to prevent the exposure of trade secrets of its supplier by refusing to submit to the court detailed circuit diagrams as possible counterevidence of non-infringement.

The general procedural rules of the German Civil Process Code and the German Judiciary Act did not help at the time. The lack of rules protecting trade secrets in patent infringement proceedings was evident. Since then, however, the German legislator has tried to fill the existing procedural gaps.

Legal landscape then

Loopholes like the one described kept arising from the limited scope of application of the procedural secrecy privileges of the German Trade Secrets Protection Act. The principles of this statute only applied in cases involving the unlawful acquisition, use or disclosure of a trade secret. Trade secret protection privileges were therefore not available in any other civil proceedings, including for patent infringement. Thus, litigants were often faced with the choice between keeping their secret or losing the lawsuit.

Legal landscape now

On August 18, 2021, Sec. 145a of the German Patent Code entered into force. Its wording expressly states that Secs. 16 to 20 of the German Trade Secrets Protection Act now also apply in patent infringement and compulsory licensing proceedings. The reference was also included in the Utility Model Act and the Semiconductor Protection Act.

As a consequence, a two-stage procedural protection of trade secrets was made possible. At the request of a party, the court may first declare information to be secret. Then, once again at the request of a party, the court may restrict access to documents or to the oral proceedings and the record thereof “in whole or in part to a certain number of reliable persons.” In doing so, courts may not only exclude the public—as previously provided for in Sec. 172 No. 2 of the German Judiciary Act—they can also limit the number of persons participating in the proceedings on behalf of the parties.

According to Sec. 19 of the Trade Secrets Protection Act, however, at least one natural person on the side of each party must have access to the information. That is why Sec. 145a explicitly provides that the rules of the Trade Secrets Protection Act do not apply within an independent evidence procedure. Thus, the so-called “Düsseldorf procedure” can still take place, in which the trade secret is solely disclosed to a court-appointed expert bound to secrecy.

Thus, by walking hand in hand, patent litigation and trade secrets protection appear to provide the opportunity for parties to get the best of both worlds.