Contact Dr. Philipe Kutschke: [ Ссылка ]
Contact Alexander Haertel: [ Ссылка ]
Welcome to our new episode of "IP Insights". Today, we want to focus on the protection of trade secrets in patent infringement proceedings. In the past, it was quite difficult to maintain secrets in patent infringement proceedings. Competitors were, for example, forced in SEP litigation to disclose license agreements in order to prove that their license offer was fair, reasonable and non-discriminatory. However, in the past it was difficult because the rules on how to maintain a secret were quite strict. The new Act on the Protection of Trade Secrets may help to solve this dilemma. Philipe, what do you think?
Well, I think this new German law will at least help to enhance the present situation because it provides new and rather clear options and processes how to keep trade secrets secret in court proceedings. From my personal view, I believe that these provisions are also applicable, mutatis mutandis, in any litigation proceedings involving trade secrets. Rumor has it that, in the field of patents, the legislator is trying to shed more light in this field of uncertainty.
That is true, indeed. There is a current draft of a reform for the Patent Act which includes a new link to the measures, the protective measures, that the Act on the Protection of Trade Secrets has in stock for clients. However, the question remains, even in patent matters, what kind of information can be called a trade secret?
That is a very good question, Alex. According to the new law, such information basically has to meet three requirements: Firstly, it has to be information which is not publicly available or easily available to professionals. Secondly, it has to be information which is subject to protective measures to be kept secret. And thirdly, it has to be information of commercial value. The requirements have become stricter and therefore companies should review their internal processes and guidelines to ensure that their valuable information remains to be protected as a trade secret. As a very basic rule: No effort, no protection. How about in the field of patents? What are the typical scenarios here?
00:02:27
In patent litigation there are mainly three main areas in which you want to keep your secrets. First of all, what I mentioned in the introduction was the SEP litigation where clients may need to disclose SEP licenses. Second, the damage calculation according to the "own lost profit". And thirdly, the rendering of account.
So which kind of information is considered to be a trade secret?
Well, that is not too easy to say. For example, in SEP litigation, you would probably need to differentiate between the different contents of a license agreement. Whereas core components of the license agreement, such as the royalty rate terms of payment are definitely a trade secret, other terms, for example, like the venue, choice of law and other more minor important regulations, will probably not be a trade secret. In the rendering of account, the typical scenario is that, after a first-instance victory, the patentee will try to enforce their claim for rendering of account and thereby force the competitor to disclose information on their customers and on their calculation of prices. This is such valuable information and it falls right in the hand of the competitor, which is a very highly guarded trade secret usually. So in these kinds of cases, it would be a sensible approach nowadays to file for protective measures so that this information can be kept secret. It is, however, mandatory to file for such protective measures already in the main proceedings because such material restrictions cannot be dealt with in the enforcement proceedings.
00:04:18
And what clients also need to know is that even applying this new law does not mean that the other parties involved will not gain any access to sensitive information, but limited access. Also, at least one person of the other party will gain access to this sensitive information.
That is very good information for clients. What clients also need to know is that there is no success guarantee for these protective measures. In view of the stricter rules nowadays, you need to prove that this information is indeed a trade secret. You may also be forced to prove that there is a negative commercial impact once this information gets out to the public. In any event, it is mandatory to apply for such protective measures before disclosing information to the other party.
So, summing up our discussion: Trade Secret protection in patent litigation matters is extremely important, but nothing that happens automatically. Once again, profound legal advice is crucial. However, in a first step, you may focus on your internal processes to protect your trade secrets. As you will see, trade secret protection is not a closed book.
