New Spanish legislation on trade secrets

On 13 March 2019, the new law on trade secrets (secretos empresariales) came into force. This Spanish law is (late in) implementing Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.

What is a trade secret?

According to the law, ‘trade secret’ means any information or knowledge, including on technology, scientific, industrial, commercial, organizational or financial, which meets all of the following requirements:

•it is secret, in that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

•it has commercial value (actual or potential), because it is secret;

•it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

This does not cover information which is not important, or the experience and skills acquired by employees during their professional career.

It is key to highlight the third point: companies must have taken reasonable steps to protect the confidentiality.  However, neither the law, nor the directive explain what “reasonable steps” are, so this would be for the companies to decide.

Compliance culture

As with many other compliance issues, it is key to nurture a culture of protection within the companies, with internal policies and procedures classifying the information and establishing who could access that information, measures to protect it, policies on the use of devices and traceability systems allowing to monitor essential data.

Employment issues

From an employment point of view, the protection of trade secrets does not affect the right to collective bargaining, and cannot restrict employees’ mobility. In addition, a disclosure of the information by an employee to the employees’ legal representatives when exercising their rights, and provided that such disclosure is necessary in order to exercise those rights, is permitted.

How is your company protecting confidentiality and trade secrets?

In any case, it will be important to review and include confidentiality clauses in employment contracts, and to train and inform employees so that they understand the rules – otherwise, if they make a mistake it might be difficult to discipline them for loss of confidential information.