Germany

Since B’s design has not yet been registered, he is not entitled to damages on the ground of an intellectual property right (such as patent, copyright, design or utility model). This, however, does not imply that the design may be used freely by anybody else. The courts and the majority of academic writers no longer regard intellectual property legislation as an all-conclusive regulation and there is a growing tendency in German law to make other legal instruments available for the protection of intellectual works.

A person’s intellectual creativity, albeit not covered by an intellectual property right, may be protected by the Unfair Competition Act:30

§1 UWG: Who, in the course of business, for the purpose of competition, acts in a manner contrary to public policy, may be subject to an injunction to refrain from this act or to a claim for damages.

It has been held that the imitation of another person’s intellectual work is contrary to public policy as defined by this provision if a competitor slavishly imitates the work of a competitor, that is, if he deceives the market about the origin of the work, immediately appropriates the results of the work of a competitor, or abuses the confidence of a competitor in order to gain possession of his knowledge.31 A, it is true, has abused B’s confidence; the parties, however, are not competitors. This is only the case with C. Therefore, A can only be held liable if C is liable according to §1 UWG and A must be regarded as his accomplice.32 C could be liable for immediately appropriating B’s chip design, provided he knew or could easily have known that the design was not A’s but nevertheless did not investigate A’s title to pass it on. These conditions, it seems, are not met. If, however, C is liable, any form of A’s participation in C’s act will suffice. The measure of damages is discussed below.

A is liable on the ground of §§280(1) 311(2) No. 1 BGB (culpa in contrahendo). The special relationship (Sonderrechtsverha¨ltnis) created between negotiating parties by virtue of the law (gesetzliches Schuldverha¨ltnis) imposes on a party the (collateral) duty to pay regard to the whole of the other party’s assets he comes into contact with during

30Gesetz gegen den unlauteren Wettbewerb (UWG).

31Baumbach and Hefermehl, Wettbewerbsrecht, §1 UWG para. 433ff.

32Mitta¨ter: cf. §§830(2), 840(1) BGB.

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the negotiations (Obhutsoder Erhaltungspflicht).33 Therefore, a party is obliged (i) to treat information sought from the other party in order to assert his bargaining position as confidential; and (ii) not to make use of such information to the disadvantage of the other party. A, therefore, was not allowed to pass on the design to C without B’s consent. He must put B into the position he would be without his breach of confidence.

As a result, B is entitled to damages which he may calculate in a threefold manner.34 A must either recompense the profits B would have made if he (B) had marketed the design himself; or pay the sum he would have had to pay to B for a licence of the design; or disgorge the profits made by his own dealing with the design.

A is also liable in tort. A may be liable on the ground of §823(1) BGB. This depends on whether the design comes within the term of an ‘other right of another’ (sonstiges Recht) as defined by this provision. It is the unanimous view nowadays that a sonstiges Recht requires a position which by law is allocated to the exclusive disposal of a certain person (position with Zuweisungsgehalt und Ausschlußfunktion). The Bundesgerichtshof has held that a computer chip design corresponds to this definition if it constitutes a business secret which comes very close to an intellectual property right.35 It would seem, therefore, that B has a claim according to §823(1) BGB, but the facts of the case are not detailed enough to permit a definitive conclusion. A is, however, liable on the ground of §826 BGB, as the law will not tolerate the abuse of information gained confidentially and A well knew that the passing on of the design would cause economic loss to B. B is entitled to calculate the damages in the threefold manner mentioned above.

A’s liability in restitution is dependent on whether B’s design amounts to a position at his exclusive disposal (position with Zuweisungsgehalt und Ausschlußfunktion).36 In this case, A is liable on the ground of illicit gestio negotiorum:

§687 BGB: . . . If a person treats the matter of another as his own, although knowing that he is not entitled to do so, the principal may enforce the claims based on §§677, 678, 681, 682. If he does enforce them, he is liable to the manager as provided for in §684 sent. 1.

33Soergel-Wiedemann, vor §275 para. 175; Mu¨nchKomm-Emmerich, vor §275 para. 77.

34BGH, decision of 18 Feb. 1977, NJW 1977, 1062, 1063.

35BGH, decision of 18 Feb. 1977, NJW 1977, 1062, 1063.

36Staudinger-Lorenz, §812 para. 23ff.

Hence, if B exercises the option granted by sentence 1, he is entitled, according to §§687(2), 681 sentence 2,37 66738 BGB to claim anything A received by virtue of his management. Then, however, he must repay the outlays A inevitably had to incur in order to manage the affair.39

If the design represents a position at the exclusive disposal of B and provided B does not exercise the option granted by §687(2) BGB, then A is liable on the ground of unjust enrichment. According to §812 sentence 1, 2nd alternative BGB,40 a party interfering with another party’s position with Zuweisungsgehalt must, as a rule, make good the value of such a position. As A knew that he was not entitled to pass on the design, he is barred from the defence of change of position.41

It would not make any difference if B told A that he expected him to treat the details of the design as confidential. The parties thereby would only contractually confirm a precontractual duty already established by virtue of the law.

Greece

B has several remedies.

First, article 197 GCC provides that the parties to the negotiations for the conclusion of a contract must abide by the principle of precontractual good faith. Although the exact scope of this obligation becomes apparent on a case by case basis, several aspects of it form the core of its content. In general, after commencing negotiations the parties must not act in a manner which contravenes a reasonable bond of trust that develops between them. More specifically, each party must negotiate in earnest, safeguard the interests of the other party and provide the other party with the information which is necessary in order to decide whether or not to conclude a contract. Consistent with

37§681 BGB: ‘The agent shall notify the principal, as soon as practicable, of the undertaking of the management of the matter, and await his decision, unless there is danger in delay. For the rest the provisions of §§666 to 668, applicable to a mandatary, apply mutatis mutandis to the obligation of the manager.’

38§667 BGB: ‘A mandatary is bound to hand over to his mandator all that he receives for the execution of the mandate and all that he obtains from the charge of the matter.’

39§684 BGB: ‘If the conditions of §683 do not exist, the principal is bound to return to the manager all that he acquires through the management of the matter under the provisions relating to the return of unjust enrichment. If the principal ratifies the management of the affair, the claim specified in §683 belongs to the manager.’

40See the German report on case 11. 41 §§818(2), (3), 819 BGB.

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the obligation to provide information is the obligation to treat the information received from the other party as confidential. In particular, the sensitive information that relates to business secrets and other kinds of trade assets, irrespective of whether they are protected by other provisions of the law, must be treated as confidential. Accordingly, whether B had told A that he expected him to treat the information provided as confidential would not make any difference, because confidentiality is already part of the obligation to conduct negotiations in good faith. Therefore, A, by divulging to a third party sensitive information with obvious economic significance, which was entrusted to him by B in the course of negotiations, acts contrary to precontractual good faith. B can claim compensation from A on the basis of article 198 GCC. The compensation will comprise the reliance interest, which includes the positive and negative (loss of opportunity/ profit) loss. In particular, in this case, B may recover from A the profit the latter made by selling B’s secret trade asset to C. Clearly, the reliance interest includes the lost profit and B could claim that irrespective of the legal basis upon which he bases his claim.42 Given these circumstances, the measure of the damages, as generally accepted in the legal literature and reaffirmed by case law, may be higher than the expectation interest.43 In addition, it is also possible for B to base his claim against A on unjust enrichment,44 although in terms of quantum of compensation he would not be better off.

In addition, B may base a claim for compensation on the Civil Code provisions on delict.45 B will have to prove fault on the part of A in causing the damage, that is, that A was either negligent or intended to inflict damage on B’s interests. Compensation in delict covers all damage causally linked to the unlawful behaviour; compensation for immaterial damage (such as damage to market credibility, prospects of growth or the loss of a cutting-edge in market innovation) may also be claimed.46

An alternative to the above remedies would be for B to invoke articles 16 to 19 of Law 146/1914 on unfair competition. These provisions provide civil and penal protection for commercial and business secrets. In particular, B may base a claim on articles 17 and 18 of that Act for compensation of the damage incurred. Under article 19,

42See below for delict and the Act on Unfair Competition.

43See the Greek report on case 1. 44 Article 904ff. GCC.

45Articles 914 and 919 GCC. 46 Article 932 GCC.