Trade secrets in Austria

  1. General
    1. 1. Has the Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“Trade Secrets Directive”) been implemented?
    2. 2. Are there any other applicable sources of law related to trade secrets?
    3. 3. How are trade secrets defined? 
    4. 4. Do specific measures or protections need to be put in place for information to benefit from protection as a trade secret?
  2. Dealings in and ownership of Trade Secrets
    1. 1. Are trade secrets transferable and/or licensable?
    2. 2. Are there specific consequences arising from transfer or licensing of trade secrets by a party other than the trade secrets owner?
    3. 3. Is co-ownership of trade secrets permitted?
  3. Enforcement of Trade Secrets
    1. 1. What actions constitute infringement of trade secrets?
    2. 2. Are there any measures allowing the trade secrets' owner to gather and/or preserve evidence of infringement of trade secrets?
    3. 3. What specific interim and final measures and remedies are available in the event of infringement of trade secrets?
    4. 4. Is there a specific period after obtaining interim measures by which the applicant must bring proceedings for a substantive decision on the merits of the claim?
    5. 5. Are there circumstances in which damages or other financial compensation may be available in place of an injunction and other measures?
    6. 6. Are any interim or final measures and remedies available through ex parte hearings?
    7. 7. How is financial compensation to the trade secrets holder calculated?
    8. 8. What is the limitation period for claims relating to misappropriation of trade secrets?
    9. 9. When does the limitation period begin to run?
    10. 10. Are there any circumstances that interrupt or suspend the limitation period?
    11. 11. Are mechanisms available to preserve confidentiality of trade secrets in the course of legal proceedings?
    12. 12. Are there any particular legitimate interests which may be invoked as an exception to the measures, procedures and remedies for trade secrets protection?
    13. 13. Are any measures available where proceedings concerning trade secrets are manifestly unfounded and / or found to have been initiated abusively or in bad faith?
    14. 14. Are separate legal proceedings required for such measures?
  4. Employee / employer liability
    1. 1. Are there any protections for “whistleblowers” or similar rights for employees in relation to infringement of trade secrets?
    2. 2. Can an employer be liable for their employee’s infringement of a third party’s trade secrets?

General

1. Has the Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“Trade Secrets Directive”) been implemented?

Yes, Austria has implemented the Trade Secrets Directive by introducing new provisions in the Unfair Competition Act (§§ 26 a – j Gesetz gegen den unlauteren Wettbewerb, “UWG”).

Austria’s Criminal Code sanctions the unlawful spying of trade secrets. There are no further sources of law specifically relating to the protection of trade secrets in Austria.

3. How are trade secrets defined? 

According to § 26 b Unfair Competition Act, which follows the definition in Article 2 of the Trade Secrets directive, a ‘trade secret’ means information, which meets all of the following requirements:

  1. it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
  2. it has commercial value because it is secret;
  3. it has been subject to reasonable steps under the circumstances, by the person lawfully in power of disposal of the information, to keep it secret.

4. Do specific measures or protections need to be put in place for information to benefit from protection as a trade secret?

Other than fulfilling the legal requirements to qualify as a trade secret, no further measures or protections need to be put in place for the information to benefit from protection as a trade secret.

Dealings in and ownership of Trade Secrets

1. Are trade secrets transferable and/or licensable?

Yes, trade secrets are transferable and/or licensable.

2. Are there specific consequences arising from transfer or licensing of trade secrets by a party other than the trade secrets owner?

No.

3. Is co-ownership of trade secrets permitted?

Yes, co-ownership of trade secrets is permitted in Austria.

Generally, ownership of a trade secret is connected to the power of disposal (“Verfügungsgewalt”) over a trade secret. Since trade secrets can be transferred and/or licensed, and there is no provision prohibiting co-ownership of trade secrets, co-ownership is possible.

Enforcement of Trade Secrets

1. What actions constitute infringement of trade secrets?

According to § 26c Unfair Competition Act, which generally adheres to Article 4 of the Trade Secrets Directive, the following actions constitute an infringement of trade secrets:

  1. The acquisition of a trade secret without the consent of the trade secret holder will be considered unlawful, whenever carried out by unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the power of disposal of the trade secret holder, containing the trade secret or from which the trade secret can be deduced, and any other conduct which, under the circumstances, is considered contrary to honest commercial practices.
  2. The use or disclosure of a trade secret will be considered unlawful whenever carried out, without the consent of the trade secret holder, by a person who acquired the trade secret unlawfully, or breached a confidentiality agreement or any other duty not to disclose the trade secret, or breached another contractual or any other duty to limit the use of the trade secret.

The acquisition, use or disclosure of a trade secret will also be considered unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought, under the circumstances, to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully.

2. Are there any measures allowing the trade secrets' owner to gather and/or preserve evidence of infringement of trade secrets?

The court can issue a preliminary order to gather and/or preserve evidence of an alleged infringement of trade secrets (§ 26i Unfair Competition Act).

3. What specific interim and final measures and remedies are available in the event of infringement of trade secrets?

At the request of the trade secret holder, the court can order by way of an interim injunction any following provisional and precautionary measures against the alleged infringer:

  • the cessation of or, as the case may be, the prohibition of the use or disclosure of the trade secret on a provisional basis;
  • the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;
  • the seizure or delivery up of the suspected infringing goods, including imported goods, so as to prevent their entry into, or circulation on, the market (§ 26i par 1 Unfair Competition Act).

Further, a court decision taken on the merits can order the cessation of or the prohibition of the use or disclosure of the trade secret; removal; payment of appropriate remuneration; in case of fault payment of damages including lost profits; rendering of accounts if necessary; right of information; publication of judgement (§ 26e-g, §16, §25 Unfair Competition Act).

4. Is there a specific period after obtaining interim measures by which the applicant must bring proceedings for a substantive decision on the merits of the claim?

The law does not provide a specific period. The court issuing the interim injunction will set a certain period during which the applicant must bring proceedings for a substantive decision on the merits of the claim.

5. Are there circumstances in which damages or other financial compensation may be available in place of an injunction and other measures?

At the request of the person liable, the competent judicial authority may order pecuniary compensation to be paid to the injured party instead of ordering the cessation of or the prohibition of the use or disclosure of the trade secret and removal, if all the following conditions are met:

  1. the person concerned only becomes aware, after the start of use or disclosure, of facts on the basis of which he knew or should have known that the trade secret was obtained from another person who was using or disclosing the trade secret unlawfully;
  2. execution of the measures in question would cause that person disproportionate harm; and
  3. pecuniary compensation to the injured party appears reasonably satisfactory (§ 26e par 3 Unfair Competition Act).

This compensation is limited to the amount of a potential license fee that would have been payable if the person concerned had requested permission to use the trade secret in question for the period for which the use of the trade secret could have been prohibited. Compensation may not be claimed retroactively for the period during which the use was lawful.

6. Are any interim or final measures and remedies available through ex parte hearings?

It is in theory possible to obtain an ex parte interim injunction, but such injunctions are extremely rare and unlikely to be granted in trade secret proceedings. Oral hearings always require the participation of the other party, but in interim proceedings it is possible for the judge to hear witnesses for informative purposes without either of the parties being present.

7. How is financial compensation to the trade secrets holder calculated?

Generally, the trade secret holder can either demand appropriate remuneration or damages in case of fault by the infringer.

When calculating the appropriate remuneration, the amount of a potential license fee that would have been payable if the person concerned had requested permission to use the trade secret will be considered (§ 26e par 2 Unfair Competition Act).

Damages are calculated either by considering the trade secret holder’s actual damage incurred or the loss of his profits (§ 26e par 1 and § 16 Unfair Competition Act). The scope of compensation includes both material and immaterial damages. In addition, the unfair profits made by the infringer, which result from the unlawful use of the trade secrets can be demanded.

When calculating damages, "all relevant factors" must be taken into account, such as the negative economic consequences, including the loss of profit of the injured party, any unfair profits made by the infringer, and the moral prejudice caused to the trade secret holder by the unlawful acquisition, use or disclosure of the trade secret. Where appropriate, damages may also be determined in the form of a lump sum, which will at least correspond to the fee or remuneration that the infringer would have had to pay if he had obtained a licence.

8. What is the limitation period for claims relating to misappropriation of trade secrets?

The limitation period for claims relating to misappropriation of trade secrets is three years after becoming aware of the damage and the liable party (§ 263 par 4 Unfair Competition Act). In any case, the maximum duration of the limitation period is six years.

9. When does the limitation period begin to run?

The limitation period starts to run when the trade secret holder becomes aware of the damage and the liable party.

10. Are there any circumstances that interrupt or suspend the limitation period?

There are no specific circumstances relating to the misappropriation of trade secrets that interrupt or suspend the limitation period. Hence, the general rules according to §§ 1494 subs Civil Code apply.

Yes.

As a first measure, it is allowed to disclose the information, which the holder claims to be a trade secret, only to the extent necessary to make plausible the existence of a trade secret and its violation. Hence, it is not necessary to disclose the trade secret in all its detail when initiating the proceedings (§ 26h par 1 Unfair Competition Act).

Further, the court will, upon request or ex officio, take measures to ensure that the alleged infringer and third parties do not receive knowledge of the trade secret beyond what they already know. Such measures may include the disclosure of the alleged trade secret only to an expert appointed by the court. The appointed expert will be instructed to submit to the court a summary that does not contain confidential information about the trade secret. All files that contain the trade secret will then be excluded from the right of inspection of the file (§ 26h par 2 Unfair Competition Act).

The court may upon substantiated request order the disclosure of the alleged trade secret in the proceedings, if its knowledge is necessary for fair proceedings or to enforce legitimate interests of the requesting party.

All persons who obtain knowledge of the (alleged) trade secret as a result of participation in the proceedings will keep the information confidential, even after conclusion of the proceedings (§ 26h par 3, 4 Unfair Competition Act).

12. Are there any particular legitimate interests which may be invoked as an exception to the measures, procedures and remedies for trade secrets protection?

The law expressly states the right to freedom of expression and information as a particular legitimate interest that may be invoked as an exception to the measures, procedures and remedies for trade secrets protection (§ 26d Unfair Competition Act). However, the law also protects all “legitimate interests recognised by Union or national law”. Hence, the disclosure of a trade secret in criminal proceedings would be protected, if for example disclosure in court is necessary for the legal defence to ensure the fair trial of the accused.

13. Are any measures available where proceedings concerning trade secrets are manifestly unfounded and / or found to have been initiated abusively or in bad faith?

Separate legal proceedings based on the general principles of civil law (especially torts) are required where proceedings concerning trade secrets are manifestly unfounded and / or found to have been initiated abusively or in bad faith.

See answer to question 13 above.

Employee / employer liability

1. Are there any protections for “whistleblowers” or similar rights for employees in relation to infringement of trade secrets?

Revealing misconduct, wrongdoing or illegal activities by the trade secret holder, provided that the respondent acted for the purpose of protecting the general public interests (i.e. whistleblowers), and disclosure by employees to their representatives as part of the legitimate exercise by those representatives of their functions, provided that such disclosure was necessary for that exercise, may be invoked as an exception to the measures, procedures and remedies for trade secrets protection (§ 26d Unfair Competition Act). An example would be the submission of evidence by employees or their representatives in the context of a dismissal challenge if it contains secret information.

2. Can an employer be liable for their employee’s infringement of a third party’s trade secrets?

No, an employer cannot be liable for his employee’s infringement of a third party’s trade secret if he is unaware of the employee’s actions.

However, an employee who unfairly promotes the competition of his new employer is himself liable.

Portrait of Egon Engin-Deniz
Egon Engin-Deniz
Partner
Vienna
Portrait of Gabriela Staber
Gabriela Staber
Partner
Vienna