Case law on Trade Secrets in Switzerland

Relevant topics related to the 2016 Trade Secret Directive (EU 2016/943)

1. Requirement to undertake reasonable steps to keep the information secret - art. 2(1)(c)

The Federal Supreme Court has held that the definition of a trade secret is essentially the same in every Swiss law that governs the handling of trade secrets (e.g. Art. 162 of the Criminal Code (CC) or Art. 5 or 6 of the Unfair Competition Act (UCA)). In BGE 142 II 268 Consideration 5.2.2.1 it defined a trade secret as a fact that is (1) neither obvious nor generally accessible (relative unknown), (2) which the owner of the secret actually wants to keep secret (will to keep secret through legal and technical measures) and (3) in the secrecy of which the owner of the secret has a justified interest in secrecy (objective interest in secrecy). This definition essentially matches the definition provided in Art. 2 (1) of the Trade Secret Directive and it has been repeatedly confirmed (e.g. in BGer 1C_665/2017 dated 16. January 2019 Consideration 3.3).

The common definition has also been confirmed by the Federal Criminal Court in recent judgments. In its judgment RR.2019.162 dated 26 November 2019 in Consideration 5.2, the Federal Criminal Court has confirmed the will to secrecy as an essential requirement for a trade secret to be protected.

In its judgment SK.2018.20 dated 15 March 2019 consideration 2.6.4.3 the Federal Criminal Court has held that there is no will to secrecy if there was prior consent of the owner of the secret to the disclosure of the concerned information.

2. Reverse Engineering - e.g. art. 3(1)(b)

Art. 5 UCA considers the adoption of a market-ready work product through technical reproduction processes without a reasonable effort on the adopter's part as illegal reverse engineering. This implies that reverse engineering is permitted as long as the adopter puts in a reasonable effort in the adoption process.

The Federal Supreme Court has defined the allowed reverse engineering in BGE 131 III 384 Consideration 4 f. 

Outside of the permitted scope is every conduct that is intended not only to imitate a competitor's product or to replicate its manufacture on the basis of knowledge gained elsewhere, but also to adopt the product without any effort of its own to elaborate it. An illegal direct adoption within the meaning of Art. 5 lit. c UCA can only be assumed if the effort required for the reproduction and exploitation of the reproduced work results is unreasonably low in relation to the objectively necessary effort for the initial production of the work.

3. Infringing products - e.g. art. 2(4) and 4(5)

Swiss law doesn’t have an analog standard that qualifies products as infringing solely based on the fact that they in some way originate from a trade secret violation. Hence, there is no case law where a product is deemed infringing because of the violation of a trade secret.

Art. 9 of the Design Act (DesA) and Art. 61 para. 1 lit. b of the Trade Mark Protection Act (TmPA) only provide for similar provisions that qualify a product as infringing when it originates from a violation of a protected design or a trade mark and give the righteous owner of the design or trade mark certain remedies. 

4. The (IP-like) catalogue of remedies - e.g. art. 10 and 12

Art. 9 UCA provides three remedies against every kind of unfair competition behaviour: 1) prohibition of a threatened infringement, 2) elimination of an existing infringement and 3) declaring the unlawfulness of an infringement if it continues to have a disruptive effect. In principle, these remedies may also be used in the case of trade secret violations. The elimination of an existing infringement includes as an ultima ratio the seizure and destruction of the product. There is, however, no federal case law where such a remedy has been imposed only based on a trade secret violation. There has only been a case on Cantonal level where the Upper Court of the Canton of Zurich has approved precautionary measures solely based on the violation of trade secrets (judgment HE180113 dated 4 July 2018). The court prohibited the further use of certain designs.

5. Exceptions / allowed uses (and their relationship to contractual secrecy provisions) - art. 1 and 5

Swiss law knows no such thing as a whistle-blower privilege. Contractual and legal secrecy provisions generally prevail. In its leading case BGE 127 III 310 Consideration 5a the Federal supreme court opened a very narrow window for the legitimate violation of contractual secrecy provisions in case of higher interests. It held that if the employer's (the owner of the secret) activity causes or could cause unlawful harm to others, the employee can only claim a prevailing interest in the breach of the secrecy provision if he himself observes the principle of proportionality. He must first confront his employer and then involve the competent authority. Only if the authority fails to act, the employee may, if the circumstances warrant it, involve the public. This means that the breach of contractual secrecy provisions is only justified if the secret information is 1) harmful/unlawful, 2) no internal process leads to improvement of the situation and 3) the competent authority fails to act.

6. Secrecy in court proceedings (“confidentiality club”) - art. 9

The court imposes protective measures in accordance with Art. 156 of the Civil Procedure Code (CPC) when there is a concrete threat to the interests of a party or a third party worthy of protection. In the case of trade secrets being at risk, the Federal supreme court approves such protective measures only in rare occasions (BGer 4A_195/2010 dated 8 June 2010 Consideration 2.2). The court is essentially free to impose any measure, as long as it is the mildest measure that achieves the purpose of protection. It can order the blackening of certain sections or impose secrecy obligation with threat of disobedience penalty on the parties. As an ultima ratio, it can refrain from taking the respective evidence (BGE 148 III 84 E. 3.2). In criminal procedures, only qualified professional secrets are protected. There is no general protection for trade secrets (Decision of the Federal Criminal Court TPF 2020 96 dated 25 May 2020 Consideration 3.3.1).