Infringement of trade secrets between joint holders – What now? – A thought experiment

The term "trade secret holder" is defined in Section 2 No. 2 GeschGehG as any natural or legal person who has lawful control over a trade secret. This generally allows for the possibility of a "joint holder of trade secrets".

So far so good – but how can one of these joint owners defend itself against the other if the latter discloses the trade secret on its own?

Possible constellations for joint ownership are: Joint ownership between companies and their shareholders, both parties obtain rights of use, independent discovery or creation of the trade secret and existence of a business relationship. In contrast to patent law (Section 6 sentence 2 PatG) or copyright law (Section 8 UrhG), the concept of joint holders of trade secrets is not expressly regulated in the GeschGehG. The GeschGehG does not contain any information on the constellation of joint owners. The EU Directive on which the GeschGehG is based is also silent on this.

However, in the absence of an express agreement, it is assumed that joint owners of trade secrets are to be qualified as tenancy in common (Sections 741 et seq. BGB). If, on the other hand, there is a contractual basis, it is regulated as a partnership (community of joint owners, Sections 705 et seq. BGB).

All owners of trade secrets certainly have the right to know and use them. But does this also apply to disclosure? It can be assumed that each joint holder is entitled to enforce a claim for injunctive relief and removal against a third party without the consent of the other holders – and then this should also apply against the infringing joint holder.

In copyright law, there is a specific regulation of the relationship between co-authors in Section 8 para. 2 UrhG, which is characterised by a strong personal rights element. It is therefore questionable whether the provisions of copyright law can be applied in the case of several holders of trade secrets (the relationship between co-authors is essentially determined by the strong personal rights aspect of copyright and its fundamental non-transferability).

Section 6 sentence 2 PatG merely stipulates that the right to an invention is jointly owned by several persons. Little can be derived from this for the question raised here.

However, the status of infringer and proprietor are not (logically) mutually exclusive in personal terms: In the case of co-owners, for example, it is conceivable that a co-owner may take action against another co-owner (as infringer). The co-owner must have the opportunity to defend himself against infringements of the right of use with a claim for injunctive relief.

In this context, the question could arise as to whether a co-owner can be subject to the infringing behaviour under Section 4 GeschGehG, as he has generally obtained possession of the trade secret lawfully. This is unlikely to be the case. Rather, the GeschGehG regulates the rights and claims between the trade secret holder and third parties. This also applies to the EU Directive on which the GeschGehG is based.

It can be assumed that such constellations are also governed by the general rules of civil law, namely in the case of a tenancy in common (co-ownership) pursuant to Sections 741 et seq. BGB, unless the joint holders have reached an agreement.

In any case, however, each co-owner can sue all partners in his own name for injunctive relief and damages in the event of a breach of a joint right.

Section 743 para. 2 BGB arguably implies that the co-owners are not entitled to the powers of exclusion associated with the joint right. In the case of a joint patent or utility model, no co-owner therefore commits an infringement if he uses the invention without the consent of the others. Since the prevailing opinion qualifies the joint ownership of trade secrets (without any agreement) as co-ownership, the same principles and rulings from patent law may be applicable. According to Section 743 para. 2 BGB, each co-owner is entitled to use the joint property, i.e. the trade secret, as long as the joint use of the other co-owners is not impaired. By agreement, majority resolution or court decision, the co-owners decide within the framework of administration (Section 745 BGB) whether a trade secret is to be used by licensing or for the co-owners' own use. If the type of use is determined as own use, Section 743 para. 2 BGB regulates the scope of use. However, use that permanently excludes the co-owners is not permitted.

Disclosure of a trade secret by a co-owner to third parties means that the benefit of the trade secret (and thus its intrinsic economic value) resulting from the secrecy can no longer be realised by the other co-owners (individually or jointly). This applies in particular if the disclosure of a co-owner to a third party is deemed permissible. The third party would then have obtained the trade secret in a permissible manner and could utilise it. This would undermine the rights of the co-ownership and its members.

In such constellations, the co-owner must therefore be able to defend himself against (such permanent) impairments of his use with an action for injunctive relief against co-owners. A culpable impairment of the right of use among co-owners must in principle also entitle the other co-owners to damages.

It is questionable whether it is possible to speak of legal certainty from an economic point of view. Therefore, in the case of joint owners of trade secrets, a contractual provision is recommended that expressly regulates the rights and obligations of the co-owners and provides for a legal enforcement mechanism.