Employee mobility, third-party know-how and the risks of using confidential information – Part 2 of our interview with Dr. Axel Oldekop

When companies think about trade secret protection, they usually focus on preventing their own confidential information from falling into the wrong hands. But what if a company is accused of using someone else’s trade secrets?

This risk becomes particularly relevant when employees change jobs, businesses recruit specialists from competitors or development teams work with information originating outside their own organization.

In the first part of our interview, Dr. Axel Oldekop of Preu Bohlig & Partner discussed what companies need to consider if they want to enforce their trade secret rights successfully. The conversation was prompted by his contribution to the latest edition of the Büscher Commentary on the German Unfair Competition Act and the German Trade Secrets Act.

In this second part, we look at the other side of trade secret litigation: How can companies avoid becoming involved in infringement disputes themselves? And what should they do if someone accuses them of misusing confidential information?

When employees move, knowledge moves with them

IP Business Academy: In the first part of our conversation, we talked about protecting a company’s own trade secrets. But companies recruit experienced employees precisely because of the knowledge they bring with them. How can that become a trade secret problem?

Dr. Axel Oldekop: Employee mobility is a normal part of business. Companies recruit people for their expertise, and employees naturally want to use the experience and skills they’ve developed throughout their careers. The difficulty is distinguishing between knowledge an employee is entitled to use and confidential information that remains protected as a former employer’s trade secret.

A development engineer, for example, may have spent years working on a particular manufacturing technology. That person will have acquired substantial technical knowledge and experience. They don’t have to forget everything they’ve learned simply because they change jobs. But that doesn’t mean they can take confidential technical documents, proprietary process parameters or other protected information from their previous employer and use it in their new role. For the new employer, this creates a risk that shouldn’t be underestimated. A company may become involved in a trade secret dispute even though it never directly accessed the competitor’s systems or documents itself.

IP Business Academy: So where exactly is the line between an employee’s professional experience and someone else’s trade secrets?

Dr. Axel Oldekop: That’s often one of the central questions in these disputes, and there’s no simple rule that resolves every case. Employees are generally entitled to use their professional skills, experience and general knowledge when they move to a new employer. Trade secret law doesn’t give companies exclusive control over everything their employees have learned. At the same time, certain information may remain legally protected, particularly where it isn’t generally known, has commercial value because it is secret and has been subject to reasonable secrecy measures.

Whether particular information can lawfully be used depends on the circumstances, including how it was obtained and whether it remains protected. That’s why companies shouldn’t assume that everything an employee knows can automatically be used in their new role. As a rule of thumb, an employee may only take with them the information stored in their memory. However, the employee may not create or take with them any records, data, documents, samples, or other physical media containing information. By the way, employees are not permitted to do so anyway, since the employer is generally the owner of such information carriers in the first place. Furthermore, if the employee has signed a legally binding confidentiality agreement, he or she may not use confidential information that he/she has merely committed to memory – at least not within a reasonable period of time.

Recruiting from competitors: What should companies watch out for?

IP Business Academy: Let’s imagine a company hires a senior engineer from a competitor. The engineer has exactly the expertise needed for a new development project. What should the company consider before involving that person?

Dr. Axel Oldekop: There’s nothing inherently wrong with recruiting someone from a competitor or benefiting from their legitimate professional experience. The important thing is to make sure the new employee doesn’t bring protected information into the company or use it in a way that infringes someone else’s rights.

That begins with clear communication during recruitment and onboarding. Companies should make clear that they don’t want confidential documents, technical files, source code, customer data or other protected material from a former employer. It’s also useful to discuss whether the employee has continuing confidentiality obligations that might be relevant to the new role. For particularly sensitive positions, especially in research and development, companies may need to examine the overlap between the employee’s previous work and their new responsibilities. This doesn’t mean someone who has worked for a competitor should automatically be excluded from similar projects. But companies should assess the risks rather than assume there won’t be a problem.

IP Business Academy: What if the new employee offers to share documents or technical information from their previous employer, arguing that it would save the team a lot of development time?

Dr. Axel Oldekop: That’s exactly what a company needs to avoid. It may be tempting to rely on such documents, or the new employee may want to use them to “shine.” However, the consequences of a trade secret infringement resulting from this can be serious – both for the company and for the employee personally. If a new employee offers confidential documents from a former employer, the company shouldn’t simply accept or circulate them. It should first clarify what the information is, where it came from and whether its use would be lawful.

Under German trade secret law, a company can face liability not only when it obtains information unlawfully itself, but also in certain circumstances when it receives or uses information through another person and knows, or should know, that it was unlawfully disclosed or used. So turning a blind eye to the origin of information is not a sensible approach. If there’s reason to believe material belongs to a former employer and may be protected, it shouldn’t be used while the situation is being assessed.

Offboarding: The other side of the same problem

IP Business Academy: We’ve talked about hiring someone from a competitor. But the situation looks different when it’s your own employee who’s leaving. What should companies pay attention to during offboarding?

Dr. Axel Oldekop: Offboarding is an important moment for trade secret protection because employees may have had legitimate access to sensitive information for years. Companies should know what information the departing employee could access and what needs to happen when the employment relationship ends. That includes returning company devices and documents, dealing with company information stored on other devices or accounts, and withdrawing access rights at the appropriate time. The company should also establish the technical and legal requirements necessary to allow it to access the departing employee’s business emails. Given the data protection issues often involved, this is not a no-brainer.

Employees should also be reminded of any continuing confidentiality obligations. But offboarding shouldn’t be treated as an isolated event. If you don’t know which information is particularly sensitive or who has access to it during employment, managing the risks when someone leaves becomes much harder. That brings us back to what we’ve said before: identifying trade secrets, implementing reasonable protection measures and documenting them – offboarding is one of the situations where the quality of those arrangements becomes particularly visible.

IP Business Academy: Would you say companies should approach onboarding and offboarding as two sides of the same process?

Dr. Axel Oldekop: Yes, I think that’s a useful way of looking at it.

When an employee leaves, the company wants to prevent its own confidential information from being taken away or misused. When hiring someone, it should make sure the employee doesn’t introduce protected information belonging to a previous employer. Companies need to understand where information comes from, who is entitled to use it and what restrictions apply. Clear procedures in both situations can reduce the risk of disputes and put the company in a better position if questions arise later.

What if a company develops something similar to a competitor?

IP Business Academy: Let’s look at a different situation. Two companies develop similar technical solutions. One claims the other must have used its confidential know-how, perhaps because it recently hired one of its former engineers. Is similarity enough to establish trade secret infringement?

Dr. Axel Oldekop: No. Similarity alone doesn’t establish that a trade secret has been unlawfully acquired or used. Companies in the same technological field may independently develop similar solutions. They may be addressing the same problems, using publicly available knowledge or working within similar technical constraints. In a highly specialized market environment, certain solutions are often “in the air.”

Trade secret law doesn’t prohibit independent development.

Under German law, independent discovery or creation is expressly recognized as a lawful way of acquiring information. So-called “parallel creations” are possible. The same applies, subject to certain conditions, to examining or reverse engineering products that are publicly available or lawfully possessed. That’s an important distinction from patent protection. A patent can, in principle, prevent a third party from using a protected invention even if that party developed it independently; provided that such party cannot invoke a right of prior use. Trade secret protection works differently. In a trade secret dispute it is essential, how the information was acquired, used or disclosed.

IP Business Academy: But if a company has hired someone who previously worked on a similar technology for a competitor, couldn’t that make it difficult to demonstrate that the new solution was developed independently?

Dr. Axel Oldekop: It can certainly make the factual situation more complicated.

If a former employee had access to confidential information and later participates in developing a similar solution for a competitor, questions about the origin of the information may arise. That doesn’t automatically mean there’s been an infringement. But it may become necessary to examine how the new solution was developed. This is where development records become important. If a company can show how a technical solution evolved, which sources were used, when decisions were made and who contributed, that can help establish the relevant facts. Documentation doesn’t make unlawful conduct lawful. And a company doesn’t necessarily have to prove independent development in every dispute. But being able to reconstruct the development process can be extremely useful when facing allegations that someone else’s know-how was used. Good development documentation therefore serves a purpose beyond project management. It can also help a company respond to trade secret infringement allegations.

What should companies do when an allegation is made?

IP Business Academy: Suppose a company receives a letter from a competitor alleging that it has used confidential technical information unlawfully. Perhaps the competitor demands an immediate stop to production or threatens an injunction. What’s important at that point?

Dr. Axel Oldekop: The first thing is to take the allegation seriously without jumping to conclusions. A claim that trade secrets have been infringed doesn’t automatically mean an infringement has occurred.

The company needs to understand which information the other side claims to be protected and what conduct is alleged to be unlawful. It should then establish the relevant facts internally. What information was used? Where did it come from? Who had access? How was the product or process developed? It is also legitimate to require proof that the information in question is, in fact, a trade secret.

If former employees of the claimant were involved, their actual role may need to be examined. Potentially relevant documents and electronic records should also be preserved. The company should avoid actions that could make it harder to reconstruct what happened. Timing can be critical, particularly if urgent court proceedings are possible. The right response depends on the allegations and available evidence. But a reliable factual picture is essential before deciding how to proceed.

IP Business Academy: What are the potential consequences if an infringement is established? Are we mainly talking about damages, or can the impact be much broader?

Dr. Axel Oldekop: The consequences can go well beyond damages. Depending on the circumstances, the trade secret holder may seek an injunction to stop further unlawful use or disclosure. There may also be claims relating to products that benefit from the unlawful use of the information, including recall, removal from the market or other corrective measures.

Information claims and damages may also come into play.

For a company that has incorporated the disputed information into a product or production process, the commercial impact can therefore be substantial. Of course, these remedies aren’t automatic. The statutory requirements must be satisfied, and proportionality may be important, particularly where measures could seriously affect the business. This is why trade secret litigation requires a strategic approach. A dispute may affect ongoing operations, product availability or future development activities, not just the financial value of particular information.

Trade secret protection is also about managing third-party risks

IP Business Academy: We’ve discussed several situations where companies may face trade secret allegations without necessarily having intended to misuse anyone else’s information. Is there a broader lesson for corporate IP management?

Dr. Axel Oldekop: I think companies need to look at trade secrets from both directions.

Most organizations focus on protecting their own confidential information. That’s important, and we’ve discussed why it matters for enforcement. But they also need to understand the risks of using information that originates outside the company. That can happen when employees join from competitors, companies collaborate on development projects or confidential information is exchanged with business partners.

The question shouldn’t only be: How do we protect our own know-how?

It should also be:

How do we make sure we’re entitled to use the know-how that enters our organization?

For technology-driven companies, that’s worth addressing before a dispute arises.

IP Business Academy: Finally, looking back at your work on the commentary and everything we’ve discussed in this interview, what would you most like companies to take away?

Dr. Axel Oldekop: I would say that trade secret protection needs to be considered from the perspective of a potential dispute, even when everything is running smoothly.

If a company wants to enforce its own trade secret rights, it needs to know exactly what it’s protecting, why that information qualifies for protection and what measures it has taken to keep it secret. And if it wants to avoid infringement allegations, it needs to understand how outside information enters the business and whether it can lawfully be used. These aren’t just legal questions to address once litigation has started. They’re closely connected to everyday business decisions.

Working on the commentary reinforced how important it is to understand the relationship between legal requirements, the actual handling of confidential information and the remedies available when something goes wrong.

Ultimately, good trade secret management should put a company in a strong position on both sides of a potential dispute.

About Dr. Axel Oldekop

Dr. Axel Oldekop is an attorney at Preu Bohlig & Partner, specialising in intellectual property litigation and trade secret disputes.

Together with Dr. Athina Theodoridis, he authored the commentary on Sections 6–14 of the German Trade Secrets Act (GeschGehG) in the fourth edition of Büscher, Gesetz gegen den unlauteren Wettbewerb – mit PAngV und GeschGehG (Carl Heymanns Verlag, 2026).

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Further reading: 👉 Litigation of Trade Secrets – dIPlex

Read also: 👉 Part 1 – Trade Secrets in Court: Why Enforcement Starts Long Before Litigation