Although emerging trends by the Danish courts highlight difficulties in proving trade secret misappropriation, two recent decisions indicate that the Maritime and Commercial Court is cementing its stance on what reasonable measures must be implemented to ensure that trade secret information is protected as such (see “Sea and Maritime Court decisions highlight difficulty in proving trade secret misappropriation”).

Paint colour recipe database case

In PPG Coatings Danmark v M Beckmann, BECKMANN INVEST and Martin Claudi Beckmann (BS-32198/2023-SHR), PPG and Beckmann had entered into a distribution agreement and the Maritime and Commercial Court ruled that Beckmann had illegally copied and used PPG’s paint colour recipe database.

The agreement contained the following confidentiality clause:

The Distributor may not, neither during the Distribution Agreement nor at any time thereafter, disclose Becker’s (PPG) know-how and/or trade secrets or other utilise such information for any purpose other than the fulfilment of this Distribution Agreement.

The distribution agreement was rescinded as Beckmann had breached it. After PPG regained possession of its toning machines and software, it appeared that, from trial purchases made after the termination of the agreement, Beckmann still had access to and used PPG’s software, including customer information.  

PPG had ensured that only authorised distributors had access to the recipe database’s user interface and that only a few trusted PPG employees with special access rights could view the correct data. 

The court’s decision

Based on witness statements, it could be assumed that the database’s unique colour recipes constituted trade secrets. The court pointed to the fact that this information is not generally known or immediately accessible to individuals who normally deal with this type of information. Therefore, there is a legitimate interest in keeping this information secret and a fair expectation that this would be ensured. 

This was supported by the costs and effort behind the development and ongoing updating of the database, as well as the confidentiality clause in the distribution agreement and limited internal and external access to the database information. 

As such, it appeared that reasonable measures had been taken to ensure its secrecy. 

Aircraft maintenance data case

In GMT Denmark (Branch of GMT, Iceland) v Magnús Þór Ómarsson and ATS Maintenance (BS-46565-2022-SHR) and GMT Denmark (Branch of GMT, Iceland) v Kristinn Þór Erlendsson (BS-47900/2022-SHR), the court found that the defendants’ unauthorised use of tools and maintenance data was a violation of GMT’s trade secrets.

GMT provides aircraft maintenance and line maintenance support to airlines. Individuals A and B had previously carried out work for GMT and started the company ATS Maintenance. Both A and B were covered by a confidentiality clause in their respective contracts. 

A and B were associated with GMT as aircraft engineers when they terminated their collaboration with the company and established ATS as a direct competitor. According to the information presented in the case, they both worked as flight engineers at GMT in Denmark, where they dealt with complicated technical matters, access to customer information, tools and maintenance data. 

GMT filed a police report alleging theft and industrial espionage by using passwords to gain insight into GMT’s – and its customers’ – data, including that of Norwegian and Fly Play airlines. It also alleged fraud against the Danish Transport Agency to obtain approval to carry out aircraft maintenance in Denmark.

In its decision, the court stated that A and B had illegally accessed and made use of maintenance data from Norwegian and Fly Play. This was further supported by witness statements that ATS never had access to maintenance data, and that this information must have been accessed in conjunction with third-party contracts with GMT. The court referenced an extract from such an agreement, which included the following:

All login access, passwords and information made available via extranet access are to be treated by Supplier as strictly confidential.

Key takeaways

Based on these decisions, it appears that the Maritime and Commercial Court is getting closer to providing a more precise definition of what steps are considered reasonable when it comes to protecting a trade secret. According to this definition, these reasonable steps include:

• password protection;
• contractual confidentiality clauses; and
• limiting access to only those necessary.