Since April 2019, the Trade Secrets Act has defined what a trade secret is in German law. Information counts as a secret only if it has commercial value because it is not generally known, if there is a legitimate interest in keeping it secret, and if its lawful holder has taken angemessene Geheimhaltungsmaßnahmen, reasonable measures to keep it secret. Examples of such measures are physical access restrictions and contractual safeguards. A company that does not guard its knowledge loses the law’s protection for it.
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The Cost of Espionage
Every year the digital industry association Bitkom asks German companies about data theft, espionage and sabotage. In its 2025 study, 87 percent of 1,002 companies said they had been affected. Bitkom put the total damage to the German economy at about 289.2 billion euros for the year. Of the companies from which data had been stolen, 29 percent lost intellectual property such as patents and research and development information.
Know-how Protection
The domestic intelligence service of Lower Saxony publishes a leaflet for companies titled Know-how-Schutz – eine betriebliche Notwendigkeit, know-how protection, a business necessity. It warns that small and medium-sized companies with special or innovative know-how are at risk. Its checklist asks the employer, among other things: Sind Geheimhaltungsklauseln in Arbeitsverträgen ein Bestandteil des Sicherheitskonzeptes? “Are confidentiality clauses in employment contracts part of the security concept?”
Kuka
In 2016 the Chinese appliance maker Midea offered 115 euros per share, about 4.6 billion euros in total, for Kuka, the robot maker from Augsburg. The federal government tried in vain to prevent the takeover. It did not want future technology to move from Germany to China. Critics feared that Midea could pull patents, data and other know-how out of Kuka. Midea’s stake rose to more than 90 percent. In November 2021 Midea demanded a squeeze-out of the remaining shareholders, and Kuka left the stock exchange.
Seven People Know the Recipe
Underberg, the herbal bitter in the small bottle wrapped in paper, has been made in Rheinberg since 1846 from a secret recipe with herbs from 43 countries. On 17 June 2025, the company’s anniversary, the family introduced its newest Geheimnisträger, keeper of the secret, to the staff: Ludwig Ruder, a 34-year-old grandson. Four members of the family and three Catholic priests now know the composition. The family says that guarding the secret guarantees the drink’s originality and quality.
The Vocabulary of Guarded Knowledge
das Betriebsgeheimnis — the trade secret. The Duden example: Das Rezept wird als Betriebsgeheimnis gehütet. “The recipe is guarded as a trade secret.”
der Wissensschatz, der Erfahrungsschatz — the treasure of knowledge, the treasure of experience. Knowledge gathered and piled up over time.
der Geheimnisträger — the bearer of secrets. A person who has official access to confidential matters.
das Kopfmonopol — the head monopoly. Knowledge that exists only in one person’s head.
der Wissensabfluss, der Know-how-Abfluss — the outflow of knowledge, the outflow of know-how
sich nicht in die Karten schauen lassen — not to let anyone look at your cards
Before the Experts Retire
As the baby boomers retire, German public employers and companies try to secure what they know before they leave. A career portal for the public sector advises starting the transfer of knowledge one to two years before retirement. It recommends an “expert debriefing” to recover Kopfmonopole, knowledge that exists only in one person’s head. In 2016 the Fraunhofer Institute for Production Systems and Design Technology published a guide on how to keep knowledge when experts and managers change jobs. It warns that knowledge gaps are very costly to close afterward.
Inventions at Work
Under the Employee Inventions Act of 1957, an invention that an employee makes on the job can be claimed by the employer. The claim is deemed to have been made if the employer does not release the invention within four months of the employee’s report. The employee then has a legal right to appropriate payment for it.
Paying Someone Not to Compete
A German company can bind an employee not to work for a competitor after leaving. Under Section 74 of the Commercial Code, the ban is binding only if the company pays compensation for its whole duration, at least half of the employee’s last pay for each year. The ban may last no more than two years and must protect a legitimate business interest.
The Knowledge Balance Sheet
In 2013 the Federal Ministry of Economics published a guide called Wissensbilanz – Made in Germany, the knowledge balance sheet. It shows companies how to record their intellectual capital, their human, structural and relational capital, alongside the financial balance sheet. The method was developed and tested with more than fifty companies. According to the guide, experts agree that most of the success of such companies comes from their intellectual capital, and that a lead in knowledge is in many fields the decisive competitive advantage.