We currently live in an environment of continuous innovation, with numerous companies and startups developing new projects and inventions that require a certain level of protection, for which a stable legal and regulatory framework is necessary.
On many occasions, companies are only concerned with protecting their inventions through patents or utility models, but there are other essential aspects of the business, such as a market strategy or a business plan, that cannot be protected through industrial and intellectual property rights but which, nevertheless, must be protected to prevent a possible leak of information to a competitor.
In order to protect these aspects, the following came into force in 2019: Law 1/2019, of 20 February 2019, on Trade Secrets (LSE), which filled a legal gap that had existed until then regarding the protection of trade secrets.
The aim of this new law is to ensure that the competitiveness of companies, which is based on know-how and undisclosed business information, is adequately protected, through the protection of trade secrets.
But what is a trade secret?
The law considers a trade secret to be any information or knowledge, including technological, scientific, industrial, commercial, organisational or financial, that meets the following conditions:
a) Being secret, in the sense that, as a whole or in the precise configuration and assembly of its components, it is not generally known to persons within the circles that normally deal with the kind of information or knowledge in question, nor readily accessible to them;
b) Having business value, whether actual or potential, precisely because it is secret,
c) And having been subject to reasonable steps by its holder to keep it secret.
Therefore, based on the above, very diverse types of information could be protected, such as lists of suppliers or customers, business plans, technical or industrial know-how, provided that the characteristics indicated above are met.
What happens with trade secrets in the employment sphere?
Article 1.3 LSE addresses this, establishing that the protection of trade secrets may not restrict the mobility of workers; in particular, it may not serve as a basis for justifying limitations on their use of experience y and skills honestly acquired during the normal course of their professional career or of information that does not meet all the requirements of a trade secret, nor for imposing restrictions in employment contracts not provided for by law. However, this does not prevent companies from taking appropriate measures to prevent such information leaks by their employees or former employees, and from having the necessary tools to take appropriate legal action in the event of a breach of a business right.
What actions are considered unlawful?
The LSE considers unlawful the acquisition of trade secrets without the consent of their holder carried out in any of the following ways:
- Through unauthorised access, appropriation or copying of documents, objects, materials, substances, electronic files or other media containing the trade secret or from which it can be deduced.
- Through any other conduct that is considered contrary to honest commercial practices.
The LSE also considers unlawful the use or disclosure of a trade secret without the consent of its holder when it is preceded by unlawful acquisition or when a confidentiality obligation or similar obligation is breached.
In view of the above, the question arises as to whether any access to, use or disclosure of a trade secret would constitute an infringement. In this case, the law establishes that not every access constitutes an infringement of the trade secret; rather, there are certain circumstances in which obtaining information that constitutes a trade secret is considered lawful:
- When access is gained through independent discovery or creation.
- In cases of observation, study, disassembly or testing without a confidentiality obligation.
- In the case of the exercise of the right of workers and their representatives to be informed and consulted, or;
- Any other conduct that is in accordance with honest commercial practices.
Therefore, it is essential to consider the circumstances in which the information leak occurs to determine whether or not it constitutes an infringement of a trade secret.
What actions can be taken to defend trade secrets?
The law provides that actions may be brought both against the individual or legal entity committing any act of infringement, and against the third party acting in good faith, meaning those persons who, at the time of use or disclosure, did not know or, under the circumstances, should not have known that they had obtained the trade secret directly or indirectly from an infringer.
With regard to the actions that may be brought against acts of infringement of secrets, the law provides for the following:
- Declaration of infringement;
- Cessation or prohibition;
- Seizure of infringing goods;
- The removal, which includes delivering to the claimant all or part of the documents, objects, materials, substances, electronic files and any other media containing the trade secret and, where appropriate, their total or partial destruction;
- The transfer of ownership of the infringing goods;
- The compensation for damages and;
- The publication of the judgment.
In this regard, it is important to bear in mind that actions to defend trade secrets are time-barred after three years from the moment the entitled party became aware of the person who infringed the trade secret.
Can a trade secret be assigned?
Finally, it is important to consider the trade secret as the object of a property right.
A trade secret is transferable and may even belong jointly to several persons, in which case the joint authorisation of all co-owners will be required to assign the trade secret or grant a licence to a third party to exploit it.
Likewise, a trade secret may be licensed for the purpose and scope determined by the parties. In this case, the licensee or sub-licensee will have the obligation to take the measures that may be necessary to prevent infringement of the trade secret.
Conclusion on trade secrets
Therefore, in view of the above, it is essential that companies, relying on this Trade Secrets Law, take the necessary measures by implementing the corresponding protocols, with the aim of protecting and ensuring proper use, both internally and externally, of their own and third parties' trade secrets.
