Trade secrets under Spanish law

Written on 21 May 2015

Spanish law lacks a per se regulation on the protection of trade secrets. It is regulated indirectly by way of prohibitions and limitations established in various texts, both civil and criminal.

The first issue on this matter to point out is that the
concept itself is not properly defined by the provisions currently in force – something
which definitely characterises the upcoming EU Trade Secrets Directive (the
Directive) as a leap forward on the matter.

The concept of a trade secret has not been deeply developed
by Spanish courts. 

Protections under
criminal law

One set of rules prohibiting the violation of trade secrets
is the Spanish Criminal Code, which contains provisions, Articles 199 and 200
therein, setting out the prosecution of those who reveal third-party – either a
natural or legal person – secrets accessed as a consequence of a labour
relationship or secrets in respect of which the violator has undertaken an
obligation of confidentiality.  

The Spanish Supreme Court 
(in its Judgment nº 285/2008, of 12 May 2008, Second Chamber on criminal
affairs) has also outlined the criteria it will use to ascertain the existence
of what will be considered as trade secret, so as to interpret the provisions
of the Spanish Criminal Code on the violation of secrets. The judgment defines
trade secrets very broadly as “any
information which, in case of disclosure, will affect the competitiveness of
the company in the market
“. 

The Supreme Court went on to establish that, under the
concept of trade secrets, technical-industrial secrets, commercial secrets, as
well as purely organizational ones, can be understood to be included.  Also, the information needs to be:

  • solely owned by the company;
  • confidential; and
  • economically evaluable for its business
    activities.

Protections under
civil law

In the civil domain, Spanish law regulates the unlawfulness
of violation of trade secrets (albeit solely in the form of industrial secrets)
by means of the Spanish Unfair Competition Act (UCA). Article 13 UCA prohibits any
disclosure or use, without the authorisation of the owner, of industrial
secrets or any other type of business secrets to which access is either
legitimate with duty of confidentiality or unlawful. This provision requires
the violation of the secret to be performed with the aim of attaining personal
or third-party advantage or harming the owner of the secret.

Therefore, according to the range of provisions prohibiting
unlawful use of trade secrets, it will be possible to seek remedies against the
disclosure of the secret by means of a civil procedure, in case of an unfair
practice, or a criminal prosecution, the latter leading to criminal penalties
and civil redress.

Protections under
contract

Once the legal grounds for seeking remedies against
wrongdoers are clear, it is worth noting common ways of protecting trade
secrets under Spanish law. Rules and obligations are normally set out in
contracts to be signed with employees and directors, for instance, as well as confidentiality
clauses, non-competition clauses or penalty clauses – the latter operating in
cases of breach or failure to comply with those obligations.

The inclusion of such covenants in agreements means they may
be enforced before a Court in case of breach. Therefore, civil redress might
also be awarded if breach of contract is proven.

Similarities with the
Directive

Spanish law for the protection of trade secrets, like that
of all other EU Member States, is soon to be reformed by the Directive. However, it is worth noting some similarities
between Spanish law as it presently exists and the current state of the draft
Directive. In general terms, Spanish law provisions on the protection of trade
secrets are mostly aligned with the current wording of the position of the
Council of the European Union taken in 2014.To take some examples:

  • The draft Directive requires Member States to provide
    measures to ensure the availability of civil redress against unlawful acquisition,
    use and disclosure of secrets to provide safeguards against their abuse.

In general terms Spanish law includes all the measures set out in the draft
Directive.  The Spanish UCA provides for
declaratory and injunctive relief (cessation, prohibition and withdrawal) and
the Spanish Civil Procedural Act includes interim and precautionary measures.

  • The draft Directive requires Member States to
    provide a statute of limitations for bringing actions against the infringer. The
    draft Directive stipulates “
    that
    actions for the application of the measures, procedures and remedies provided
    for in this Directive may be brought within at least one year
    “, which
    is the position already adopted in Spain. However, the original draft Directive
    and the Spanish law do not apply the same criteria when referring to the
    expiration date.  The Commission’s draft of
    the Directive stated 6 years after the date on which the applicant became
    aware, or had reason to become aware, of the last fact giving rise to the action;
    whereas the Spanish regulations establishes 3 years.
  • Article 9 of the draft Directive requires Member
    States to enable the competent judicial authorities to order any of the
    following measures (each of which are also applicable under the Spanish Civil Procedural
    Act):

    • the cessation of or, as the case may be, the prohibition of the use or disclosure of the trade secret on an interim basis; 
    • the prohibition to produce, offer, place on the market or use infringing goods, or import, export or store infringing goods for those purposes; 
    • and/or
      the seizure or delivery of the suspected infringing goods, including imported goods, so as to prevent their entry into or circulation within the market.

Beyond these precautionary
measures, the injunction and corrective measures are developed in the draft Directive.
The Spanish regulations allow any of those measures to be sought on behalf of
the interest of the claimant.

  • Article 13 of the draft Directive establishes
    the formulae to be applied by the authorities to set the minimum amount of
    damages, on the basis of royalties or fees which would have been due if the
    infringer had requested authorization to use the trade secret in question.

Spanish law contains no provision for calculating damages.  The claimant must determine the amount he
considers legitimate and the judge is empowered to reduce it. Spanish courts rarely
award moral damages; the damages available to a claimant are those arising from
the valuation of the damages itself and the loss of potential profits.