New Regulation on the Protection of Trade Secrets in Spain

1 April 2019 - Susanne Dumke

Susanne Dumke Rechtsanwältin & European Jurist +34 91 319 96 86

Since January 2019, trade secrets are directly protected by Spanish national law. The corresponding EU Directive (2016/943/EU) was transposed to national law by means of Law 1/2019, of 20 February 2019, on Trade Secrets.

Before such transposition, a consistent definition of the term “trade secrets” did not exist in Spain, but now it was introduced by Article 1 of this new law. This law permits the consistent determination and corresponding protection of trade secrets for the first time. A trade secret is secret information, unknown to those who usually handle such kinds of information and not readily accessible. Furthermore, the information needs to have been attributed a commercial value, precisely because it is secret, constituted by a potential or actual value. The last requirement is that the information be kept secret to a reasonable extent by the holder.

The new law on trade secrets creates a new economic value benefitting their holders, which can also be used by small and medium-sized companies. Moreover, the recognition of the special value of trade secrets further promotes innovative and creative approaches. Investments made in research and development are not only protected, they are also seen as a factor in the competitiveness and market success of companies.

Trade secrets form part of the information exchanged between companies or between companies and research institutes. This exchange of knowledge is essential for the work of many companies in research and development. Furthermore, the new law gains additional relevance due to the global and interconnected world we live in, in which more and more tasks are outsourced and data, and thus trade secrets, must be shared with third parties.

To invoke the protection of the new law, the information holder must keep it secret to a reasonable extent or make reasonable effort to keep it secret. Fulfilling this requirement of “reasonable effort” will be important for companies in the future. For this purpose, the respective measures must be incorporated into the daily activity of companies and compliance with these measures must be ensured.

With the present regulation on trade secrets, especially for companies with extensive research and development activities, the implementation of the laws will play a crucial role in the companies’ future. A detailed analysis must be made of what the legal requirement of “reasonable effort” entails; this, its necessary implementation and its monitoring in practice are all of great importance.

In addition to that, the new law will affect contracts with employees. It must be ensured that employees cannot share information without permission or put this information at risk in any other way. In each particular case, verification must be made of which measures need to be taken and which contracts need to be adapted in order to sufficiently protect trade secrets as part of the fundamental value of each company.

More information: Susanne Dumke