Protecting Confidential Information in Litigation

How German law protects confidential information in litigation

German civil proceedings are public, and the opposing party is entitled to see everything the court relies on. That has long deterred companies from pleading price calculations, source code, formulas or customer data. Two sets of rules now address the problem. The Trade Secrets Act (Gesetz zum Schutz von Geschäftsgeheimnissen, GeschGehG) gives courts specific tools in §§ 16–20 to protect confidential information in litigation about trade secrets. Since the Judiciary Strengthening Act (Justizstandort-Stärkungsgesetz) took effect on 1 April 2025, § 273a ZPO extends those tools to civil proceedings generally, so that any party can apply to have information classified as confidential.

The practical effect is significant. A distributor suing over termination, a buyer litigating an earn-out, a supplier defending a damages claim or a party to a construction dispute can now ask the court to classify sensitive information as requiring confidentiality, restrict access to a limited circle of people and exclude the public from the hearing. The protection is available only where the information can qualify as a trade secret, and it has to be requested — courts do not act on their own motion.

Timing and preparation therefore matter as much as the legal basis. Companies that plan their evidence early can decide which information they need to plead, which can be summarised and which must be protected, rather than discovering the problem when a pleading deadline is about to expire.

The trade secret threshold

Protection under § 273a ZPO and §§ 16 ff. GeschGehG depends on the information potentially being a trade secret within the meaning of § 2 no. 1 GeschGehG. Information qualifies if it:

• is not generally known or readily accessible to people in the circles that normally deal with such information, and therefore has economic value;
• is the subject of reasonable secrecy measures by its lawful holder; and
• is information in whose confidentiality there is a legitimate interest.

The second element often decides the case. A company that cannot show access restrictions, confidentiality agreements, labelling or IT security for the information may fail to obtain protection in court, however sensitive the information is commercially. The applicant must make the trade secret status credible (§ 20(3) GeschGehG) — full proof is not required at this stage. Our insight on trade secrets protection under the GeschGehG explains what reasonable secrecy measures look like in practice.

What the court can order to protect confidential information in litigation

Classification as confidential

On application, the court can classify information in dispute as requiring confidentiality in whole or in part (§ 16(1) GeschGehG). The effect is a statutory duty of confidentiality: the parties, their counsel, witnesses, experts and everyone else involved in the proceedings or with access to the documents must treat the information as confidential and may not use or disclose it outside the proceedings, unless they obtained it independently (§ 16(2)). The duty applies to everyone involved, including in-house lawyers and party representatives. Third parties with a right to inspect the file receive only a redacted version (§ 16(3)).

Access restrictions and closed hearings

In addition, the court can restrict access to documents containing trade secrets, to the oral hearing and to its record, to a limited number of reliable persons (§ 19(1) GeschGehG). This requires a balancing exercise: the confidentiality interest must outweigh the right to be heard, effective legal protection and a fair trial.

At least one natural person from each party and its counsel must always be granted access. Where such restrictions are ordered, the public can be excluded from the hearing (§ 19(2)); outside that framework, § 172 no. 2 of the Courts Constitution Act (Gerichtsverfassungsgesetz, GVG) allows exclusion of the public where important business secrets are discussed.

Sanctions and duration

Breaches can be sanctioned by administrative fines of up to EUR 100,000 or administrative detention of up to six months (§ 17). The duties continue after the proceedings end, unless the court has finally held that there is no trade secret or the information becomes generally known (§ 18).

Procedure: how to apply

The court can order these measures from the time proceedings are pending (§ 20(1) GeschGehG). The other party must be heard, at the latest after the order (§ 20(2)). The applicant must label the passages that contain trade secrets in its submissions and, where access is to be restricted, file a non-confidential version that can be inspected (§ 20(4)). If no such version is filed, the court may assume consent to inspection. The decision is made by order; classification and access restrictions can only be challenged together with the appeal against the final decision (§ 20(5)).

A workable application usually contains:

1. a precise description of each item of confidential information and why it is not public;
2. evidence of reasonable secrecy measures, for example a declaration by the responsible manager and copies of policies or NDAs;
3. a proposed confidentiality circle naming individuals on each side, often external counsel and a limited number of in-house representatives or experts;
4. redacted and unredacted versions of the relevant pleadings and exhibits.

Confidential information in litigation in special proceedings

Patent disputes and the UPC

In patent cases before the German courts, §§ 16–20 GeschGehG have applied by statute since 2021 through § 145a of the Patent Act (Patentgesetz, PatG), with all information introduced by the parties treated as information in dispute; independent evidence proceedings are excluded from that rule. Before the Unified Patent Court, the Rules of Procedure provide for confidentiality orders and confidentiality clubs. See our page on patent litigation.

Expert evidence and inspections

Trade secrets often have to be shared with a court-appointed expert. The confidentiality order should expressly extend to the expert and any assistants and address how the expert may inspect premises, systems or data. Our insight on expert evidence in German civil procedure covers how to brief the court on these points early.

Commercial Courts and arbitration

The new Commercial Courts and Commercial Chambers established under the Judiciary Strengthening Act apply the ZPO, so § 273a is available there too, and the parties can agree on a procedure that suits complex commercial matters. Arbitration remains the most private forum, because hearings are not public and confidentiality can be agreed. However, arbitral confidentiality is contractual and does not bind witnesses or experts automatically, and state court proceedings to set aside or enforce awards are public unless measures are ordered. See our page on Commercial Courts.

Preparing for confidential information in litigation before a dispute

The best protection starts long before a claim is filed. Because court protection depends on trade secret status, a company's everyday information governance determines what it can later shield in court. Practical steps include classifying information by sensitivity, restricting access on a need-to-know basis, using confidentiality agreements with employees, suppliers and joint venture partners, and documenting these measures so that they can be shown credibly in a later application.

Contract drafting matters too. Dispute resolution clauses can provide that the parties will jointly apply for measures under § 273a ZPO in any litigation, agree in advance on the composition of confidentiality circles, or choose arbitration for disputes likely to involve the most sensitive data. Supply, licence and distribution agreements should define confidential information broadly enough to cover the data likely to become relevant in a dispute, such as cost calculations, rebates and technical specifications.

Illustration

Illustration: a hypothetical machine builder sues a former distributor for unpaid invoices; the distributor counterclaims for compensation and argues that the manufacturer's price lists were discriminatory. To defend the counterclaim, the manufacturer must disclose its pricing to other distributors. Before filing its defence, it applies under § 273a ZPO to have the pricing data classified as confidential, proposes that access be limited to the distributor's external counsel, one managing director and an expert, and files a redacted version for the court file.

The court hears the distributor, confirms the classification and restricts access accordingly. This is the type of case that, before April 2025, would often have been settled to avoid disclosure.

Limits and strategic considerations

Measures protecting confidential information in litigation are not a disclosure mechanism. German law has no general pre-trial discovery, and the protective regime does not oblige a party to produce documents it would otherwise not have to disclose. Its role is to make it possible to present or produce sensitive evidence without losing control of it. Courts also have to respect the opponent's right to be heard: an attempt to keep core facts from the other party's decision-makers entirely will usually fail.

Strategically, companies should weigh what they gain by pleading sensitive details against the residual risk, even with protection. In-house representatives within the confidentiality circle are bound by the statutory duty, but the information remains in their heads. Where the opposing party is a competitor, the composition of the circle is therefore often the most contested part of the application, and courts look closely at each person's role. For competitor disputes, an "external eyes only" approach, with experts and counsel but no business representatives, may be justified for the most sensitive data — subject to the statutory minimum of one natural person per party.

How TRW & Co helps protect confidential information in litigation

We help companies plan how to protect confidential information in litigation before and during proceedings in the German courts, the Commercial Courts and arbitration. That includes identifying information that needs protection, documenting reasonable secrecy measures, drafting applications under § 273a ZPO and §§ 16–20 GeschGehG, negotiating confidentiality circles with the opposing side, and preparing redacted pleadings and exhibits. We also advise on handling confidential material with court-appointed experts and on enforcing confidentiality orders. Our commercial litigation team works closely with our IP colleagues on trade secret disputes. To discuss a pending or planned case, please contact us.