International Jurisdiction

Volume 2

# GeschGehG: Injunctive relief, § 6; International jurisdiction, Art. 7 No. 2 Brussels Ia Regulation, § 15 para. 2 sentence 2 GeschGehG.  

# Directive Art. 6 Measures, procedures and remedies, Art. 10 Provisional and preventive measures.

Last week, we already dealt with questions of the international jurisdiction of German courts for the protection of trade secrets. The protection concept of the Trade Secrets Act allows the holder to also take action against downstream perpetrators who have obtained a trade secret that originates from a prior unlawful acquisition or disclosure by another. However, a downstream perpetrator is liable only if he, at the time of obtaining or disclosing the trade secret, knew or ought to have known of the prior illegal offense, Section 4(3) GeschGehG, Article 4(4) Directive. This long arm of the law is important in practice, because it enables the holder to also take action against backers, whose actual exploitation possibilities can exorbitantly multiply the damage already caused by the direct perpetrator. If they are located abroad, the question arises as to whether German courts have international jurisdiction and the holder can therefore assert an infringement under the Trade Se crets Act in Germany.

What is the place where the tortious act was committed?

The international jurisdiction of German courts is derived from the provision on local jurisdiction in Section 15 of the Trade Secrets Act. If the downstream perpetrator does not have a legal residence in Germany, "only" the court in whose district the act was committed has jurisdiction under Section 15 (2) sentence 2. The jurisdiction of the courts of the locus delicti is found in many regulations on tortious claims; it is similarly contained, among others, in § 32 ZPO, § 14 Abs. 2 S. 2 UWG or Art. 7 Nr. 2 Brussels Ia-VO. According to general understanding, the locus delicti includes both the place where the perpetrator of the tort has acted and the place where the effect of the tortious act occurred

What to do if backers are based abroad?

On November 25, 2021, the Higher Regional Court of Düsseldorf issued an important decision in this regard (Case No. 15 SA 1/21): The holder of a trade secret wanted to take action for infringement of his trade secrets both against a competitor based in Germany - the direct perpetrator - and against its parent company and its legal representatives. The last two were based in the Netherlands and Spain respectively. The holder accused them of controlling and monitoring the business activities of the direct perpetrator. He filed a claim against all parties for, among other things, injunctive relief and a determination of their obligation to pay damages. For this, the international jurisdiction of German courts had to be given with regard to all litigants. The court clarified that if several perpetrators have acted at different locations, the main perpetrator’s place of action is not automatically attributed the other participants. The place matters where each of them has effectively acted.

Where is the place where the effect of a trade secret infringement occurs?

The Düsseldorf Higher Regional Court affirmed the international jurisdiction of German courts also with regard to the defendants domiciled in the Netherlands and Spain on the basis of Art. 7 No. 2 Brussels Ia Regulation. As directly applicable EU law superseding, it supersedes Section 15 (2) sentence 2 of the German Trade Secrets Act. The courts of the place where the harmful event occurred or may occur have jurisdiction for tortious acts. According to the court, a trade secret infringement qualifies as tort within the meaning of Art. 7 No. 2 Brussels Ia Regulation, which includes all claims arising from the infringement, i.e. claims for injunctive relief, removal, monetary compensation and information. The "place where the harmful event occurred or may to occur" is - according to the established case law of the European Court of Justice - both the place where the perpetrator of the tort has acted and the place where the effect of the tortious act occurred. Thus, a defendant could be sued before the court of one of these two places, at the choice of the plaintiff.

According to the Düsseldorf Higher Regional Court, the place where the effect of the trade secret infringement occurred is in Germany: Since the plaintiff is asserting a trade secret infringement, it must be assumed that damage has occurred in Germany, because it concerns trade secrets of the plaintiff, who is domiciled in Germany and is economically active here. The place of effect was to be located at the registered office of the plaintiff as holder of the infringed trade secrets.

Düsseldorf vs. Karlsruhe

The decision contradicts the ruling of the Karlsruhe Higher Regional Court of March 31, 2022, on a comparable situation, albeit one to be decided under Section 15 (2) sentence 2 of the German Trade Secrets Act, which we reported on last week: the Karlsruhe court had denied the international jurisdiction of German courts arguing that the effect of the tort is not the infringement of the trade secret in terms of an impact on the holder, thus a noticeable impairment of the secret but already its acquisition, use or disclosure - regardless of an effect on its holder. Hence, the place of action and the place of effect were the same The Karsruhe court thus denied the international jurisdiction of the German courts at the registered office of the holder of the infringed trade secrets.