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Last March the new trade secrets act was approved; the new regulation will improve the legal protection of business secrets.

Last March, Law 1/2019 of 20 February on Trade Secrets (“LTS”) came into force. This regulation has its legislative antecedent in Directive (EU) 2016/943, which the Spanish legislator now transposes into domestic law.

The approval of this regulation represents a relevant advance in the area, since until now the regulation was deficient and dispersed and caused a certain degree of legal uncertainty. With the new regulation, the concepts are clarified, the patrimonial aspects of these business assets are defined and, above all, a series of tools are granted in order to protect and defence the trade secrets. Therefore, this legal reform must be positively assessed, as it contributes to creating an environment of legal certainty that guarantees fair competition in the market.

Let’s start with the definitions: the new regulation understands that a trade secret is any information or knowledge, including technological, scientific, industrial, commercial, organisational or financial, which: 1) is secret, in the sense that it is not generally known or easily accessible; 2) has a business value, whether real or potential, because it is secret, and 3) has been the subject of reasonable measures to keep it secret.

Additionally, the LTS regulates and defines what should be excluded from the concept of trade secret, in order to avoid unnecessary conflicts. In this sense, a trade secret is not infringed when the information or knowledge is obtained by independent discovery or creation; when it is obtained by reverse engineering (observation, study, disassembly or testing of a product or object); when it arises in the exercise of the right of workers and workers’ representatives to be informed and consulted; or, in short, when such knowledge arises from any other action in accordance with fair commercial practices.

Once the object of protection has been defined, the LTS specifies what is to be considered as unlawful intrusions in the said business sphere of secrecy, namely: 1) obtaining of business secrets without the consent of the owner; 2) their use and disclosure to third parties without authorization; and 3) the unauthorized production and commercial exploitation by means of illegitimate use of said secret.

As an asset of the company, the LTS also acknowledges the patrimonial aspect of the trade secret, briefly regulating the regime of transmissibility and co-ownership of the secret, as well as its licensing regime.

The LTS includes a block of rules devoted to the actions of defence of trade secrets in case of infringement. The actions described in the LTS are analogous to similar areas such as intellectual property or unfair competition, making available to the owner of the infringed trade secret a number of legal instruments of protection: from the action declaring infringement of the secret, cease and prohibition to resume the infringing acts, the seizure of illegal goods, to the compensation for damages caused and the publication of the judgment.

When calculating compensation for damages, and like infringements of intellectual property rights, the infringed owner is entitled to choose between the economic damages suffered by the owner of the trade secret -including loss profits and unfair enrichment- and the hypothetical license royalty, i.e. the amount that the defendant would have had to pay to the owner of the trade secret for the granting of a license.

Special mention should also be made of the statute of limitations of the action to bring the actions: three years from the moment when the legitimate party became aware of the infringement.

Also of interest is the procedural aspect of the reform. The LTS foresees that the competent courts to follow the actions are the commercial courts, which seems adequate due to its specialization in intellectual property and unfair competition matters.

In short, this is a welcomed and expected legal reform that completes the normative block of protection of intellectual and industrial property rights and unfair competition; it will certainly have a positive effect on the improvement of the legal certainty and the competitiveness in the market.

Este artículo está disponible en: Castellano Deutsch Català

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