How can you protect your business and trade secrets in Austria?
On 20 July 2023, the Austrian National Council passed a significant increase in penalties for the violation of business and trade secrets. This was necessary due to a significant increase in secrecy violations.
Business and trade secrets are information of high commercial value. Therefore, business and trade secrets are usually protected by comprehensive confidentiality agreements.
The Austrian Criminal Code (Strafgesetzbuch (StGB)) and the Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb (UWG)) had already made the violation of business and trade secrets subject to criminal penalties. The legislator has now significantly increased these penalties. The amendments will come into force on 1 September 2023.
The most important changes are as follows:
1. Increase in penalties
In future, violations of business and trade secrets (Section 122 of the Austrian Criminal Code) will be punishable by up to two years in prison. Anyone who commits the act in order to gain a pecuniary advantage may face a prison sentence of up to three years.
In the case of gathering information about business and trade secrets (Section 123 of the Austrian Criminal Code), the prison sentence is increased to a maximum of three years. If the act is committed for the benefit of another state or a foreign company, the prison sentence could be up to five years.
In addition, the unauthorized exploitation of business and trade secrets by employees (Section 11 of the Unfair Competition Act) will be sanctioned by a prison sentence of up to one year or a fine of up to 720 daily rates . This sanction also applies to the improper exploitation of business and trade secrets by persons outside the company who are entrusted with templates (e.g., models, patterns or lists) or technical regulations (technical descriptions) as part of their business relationship.
Shift of court jurisdiction
The increase in the penalties in the Austrian Criminal Code automatically leads to a shift in court jurisdiction. Thus, in the future, the single judge of the regional court will be responsible for secrecy violations. For offenses under Sections 11 and 12 of the Unfair Competition Act, the regional court’s own jurisdiction in the main proceedings is expressly determined.
2. Exemption of the aggrieved company from the cost risk
In future, criminal prosecution by the public prosecutor’s office can be carried out with the authorization of the person concerned (authorization offense). The aggrieved company will therefore still have the option of deciding whether a criminal prosecution should take place at all. At the same time, however, the aggrieved company will also be relieved of the previous cost risk.
Companies are advised to take the increased penalties as an opportunity to develop internal protective measures and train employees on the importance of the protection of business and trade secrets. For example, comprehensive and indefinite confidentiality agreements in employment contracts are just as essential as contractual penalties for disclosing business and trade secrets.