Increased protection of business and trade secrets in Austria

Today, 7 July 2023, the Austrian National Assembly adopted amendments to the Criminal Code and the Unfair Competition Act (UWG) to strengthen the protection of business and trade secrets and facilitate the fight against industrial espionage.

Significant increase in prison sentences for “know-how spies”

In the Criminal Code, the penalties for violating or spying on business and trade secrets are multiplied. Thus, increasing imprisonment for the violation of business and trade secrets up to two years instead of the prior maximum sentence of six months.

Scouting on business and trade secrets is now sentenced up to 3 years imprisonment and in case the scouting is in favour of foreign countries – outside of Austria – faces a prison sentence of 6 months (minimum sentence) up to 5 years.

Also, the criminal provisions in the UWG will be increased from the previous 3 months or a fine up to 180 daily rates to up to one year imprisonment or fine up to 720 daily rates.

Easier prosecution through change to “authorisation to prosecute” (“Ermächtigungsdelikt”)

In the event of suspected infringement of know-how, up to now the injured party had to investigate and present the facts relevant to criminal law himself/herself and if they were “ready for indictment”, pursue private prosecution (“Privatanklage”) with the court. For those affected in the past, the private prosecution proceedings were time-consuming, cost-intensive associated with a hardly predictable outcome. Due to the changes made within the framework of the government programme 2022-2024 “Out of Responsibility for Austria”, the criminal enforcement of the violation of trade secrets is much easier.

Specifically, the criminal offences of § 122 Austrian Criminal Code (violation of business and trade secrets) and § 123 Austrian Criminal Code (spying on a business and trade secret) and the criminal offences in the UWG are turned into an “authorisation to prosecute” (“Ermächtigungsdelikt”).

This relieves trade secret owners of the burden of investigation and the cost risk of private prosecution and delegates the investigation and prosecution of trade secret violations to the criminal investigation department and to the public prosecutor's office. However, the injured party can still decide whether he/she wishes to prosecute and, if so, “authorise” the public prosecutor's office to prosecute. This freedom of decision is important for the person concerned, as trade and business secrets often concern highly sensitive issues.

The amendments will enter into force as scheduled on 1 September 2023.

Practice Tip:

When writing a statement of facts (“Sachverhaltsdarstellung”) to the prosecution authorities, it is important to “prepare” the facts well, both legally and technically. In practice, cooperation with IT forensic experts who specialise in such cases has proven to be effective.

Martin Prohaska-Marchried and Wolfgang Kapek regularly represent companies in Austria in enforcing and defending trade secret claims and are authors of the handbook "Know-How Protection compact" published by Austrian Standards.