A new step in protecting companies' intangible assets.
On March 13, Law 1/2019, of February 20, on Trade Secrets, came into force, through which Directive (EU) 2016/943 of the European Parliament and of the Council, of June 8, 2016, on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure, has been transposed into internal law.
This regulation provides legal cover for the protection of trade secrets, whose defense until now was restricted, in part, in other regulatory codes (Unfair Competition Law, Penal Code, etc.) and mostly in contractual regulation.
According to the new Law, trade secrets are defined as “any information or knowledge, including technological, scientific, industrial, commercial, organizational or financial information” that meets the following conditions:
- a) To be secret, in the sense that, as a whole or in the precise configuration and assembly of its components, it is not generally known by, or easily accessible to, people belonging to the circles in which the type of information or knowledge in question is normally used;
- b) to have a business value, whether real or potential, precisely because it is secret, and
- c) have been subject to reasonable measures by its owner to keep it secret.
In light of this definition, it is vital that companies make the effort to identify the knowledge or data that may be critical to the company, and once these secrets have been defined, establish certain precautionary and protective measures in order to restrict access to them and thus keep them secret.
If these conditions are not met, for the purposes of the Law, such knowledge or data will not be considered trade secrets.
By way of illustration, the definition of trade secrets could include certain non-patentable inventions, algorithms, mathematical or chemical formulas, industrial or organizational procedures, lists of clients, suppliers, data relating to costs and prices, in short any data or information that may have business value.
In accordance with the provisions of the Law, the following actions constitute a violation of trade secrets:
– Obtaining trade secrets without the consent of the owner when carried out through unauthorized access, appropriation or copying of documents, objects, materials, substances, electronic files or other media, which contain the trade secret or from which it can be deduced; and any other action that, in the circumstances of the case, is considered contrary to fair commercial practices.
– The use or disclosure of a trade secret obtained unlawfully, or by breaching a confidentiality agreement or any other obligation not to disclose the trade secret.
On the other hand, the Law also establishes certain cases in which obtaining information constituting a trade secret is considered lawful as long as it is obtained by one of the following means:
- a) Independent discovery or creation;
- b) The observation, study, dismantling or testing of a product or object that has been made available to the public, without any obligation of confidentiality;
- c) The exercise of the right of workers and workers' representatives to be informed and consulted, in accordance with European or Spanish law and current practices;
- d) Any other action that, according to the circumstances of the case, is in accordance with fair commercial practices.
For the protection of trade secrets, the Law establishes a wide range of actions that the owners of the secrets may take against the infringers thereof, such as declaration, cessation or prohibition, seizure of the infringing goods, removal, attribution of ownership of the infringing goods, compensation for damages and losses and publication of the judgment.
Finally, it should also be noted that, in order to prevent holders of infringed trade secrets from failing to protect their rights precisely to avoid further disclosure of their secrets, the Law empowers judges hearing cases relating to violations of trade secrets to adopt measures aimed at protecting information or documents that may constitute trade secrets and that form part of the proceedings, such as restricting the number of people who can access certain documents, limiting the number of attendees at hearings, or publishing non-confidential versions of the rulings issued.
In short, we understand that the entry into force of the Law should be used by companies to take into consideration those intangible assets that they consider critical and try to protect them, both internally (through the implementation of internal protection measures and restriction of access to those assets, as well as through the signing of confidentiality agreements with their employees regarding those secrets), and externally, by identifying those trade secrets in their relationships with third parties and the consequent adoption of protective contractual measures.
If you require our assistance to obtain more information or have any questions, please contact us via email at ambit@ambitassessor.com or at our offices.
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A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.
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