On last Thursday, February 21th, the new Law on Trade Secrets (LSE) has been published, and will come into force in twenty days. The approval of this law is the result, out of deadline, of the transposition of Directive (EU) 2016/943, of June 8th, 2016, regarding the protection of undisclosed technical knowledge and business information against its illicit obtaining, use and disclosure.
The objective of the European Directive is to ensure that the competitiveness of European companies and research bodies based on know-how and undisclosed information are adequately protected and, in turn, to improve the conditions and framework for the development and exploitation of innovation and the transfer of knowledge in the internal market.
This new regulation provides the Spanish legal system with sufficient tools to protect innovation and represents a great advance in the legal protection regime for trade secrets, especially taking into account the digital era in which we are immersed. The new law seeks to improve the efficiency of the legal protection of trade secrets.
The LSE describes trade secrets as any information or knowledge, including technological, scientific, industrial, commercial, organizational or financial that is secret, has business value and has been subject to reasonable measures by its owner to keep it secret.
Among the novelties that are introduced in the LSE, is the incorporation of rules to preserve the confidential treatment of the information that is contributed or generated in the process and that may constitute a trade secret. In addition, it also regulates the character of assets of the trade secrecy and establishes its potential co-ownership and its transferability, incorporating a series of defense actions by the owner of the secret to deal with the possible violation of this, with special attention to the regulation of compensation for damage.
The recently approved law establishes the parameters within which these secrets are framed and, above all, the requirements that these secrets must meet to be considered as such. To emphasize that it is necessary that the holders of the information or knowledge take the necessary measures to keep as secret the information that is considered secret due to its business value, whether current or potential.
Companies have to be aware of the importance of trade secrecy; it is to be considered as an intangible asset of it, and companies that are still not aware of that have to give value to their know-how and the knowledge they possess, since part of their value is due to these secrets. This rule should help to make the owners of a trade secret aware of the need to take measures to protect it.
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Marc Baró – Lawyer