Trade Secrets Act
On 13 March 2019, Law 1/2019 of 20 February on Business Secrets (LSE) came into force, transposing into Spanish law Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed technical knowledge and business information (trade secrets) against unlawful obtaining, use and disclosure.
The new law not only defines the concept of “Business Secret”, a concept not defined by Spanish laws until now, but also establishes a unified legal protection of business secrets which, until now, were protected through various laws, such as the Criminal Code or the Unfair Competition Act. With the new law, the concept of business secret is harmonized within the framework of the European Union.
The Business Secret is an intangible asset that brings value to society, hence the need to protect it through the LSE.
Having said that, what is meant by “Business Secret”?
A trade secret is any information or knowledge, including technological, scientific, industrial, financial, organizational or commercial information that is kept secret, has a business value by the very fact of being secret, and has been the subject of reasonable measures by its holder to keep it secret. This last point is of great relevance since the legislator intends to make companies aware, once again, of the importance of introducing both technical and legal protection protocols (Corporate Compliance) in order to protect confidential information.
Thus, when it comes to taking measures, it will be important for companies:
- Select the information you consider to be of special relevance.
- Introduce clauses in employment contracts prohibiting the release of information.
- Train senior officials in the use of the business secret.
- Introduce computer systems to protect information of special relevance.
- Establish internal sanctions in case of escape and violation of the trade secret.
It is important to qualify that, in accordance with the law, not only is the use or disclosure of a business secret without the consent of its owner considered unlawful conduct, but also the obtaining of such consent. Depending on the infringing activity, the injured party may take different legal actions, such as
- The declaration of the violation of the Business Secret.
- The prohibition of illegal acts.
- The seizure of the products manufactured as a result of the use of the business secret and its possible attribution of ownership of the infringing goods to the injured party.
- Requesting the corresponding compensation for damages suffered, the calculation of which will take into account: “factors such as economic damages, including loss of profit, suffered by the holder of the business secret, unjust enrichment obtained by the infringer and, where appropriate, other elements not of an economic nature
Finally, it should be noted that trade secrets are subject to transfer, license of use or assignment, which makes them similar to protected industrial property rights such as trademarks or patents