Friday, 8 of March of 2019

In an increasingly competitive and interconnected world, it is convenient for companies to protect their intangible assets and their valuable information for their business model. To do so, two different ways of protection are offered to them: by intellectual property rights (IPR) or as trade secret.

Protecting information through trade secrets can be justified either because the information does not meet the necessary requirements to be patented, or because the owner considers that the best way to safeguard confidentiality is not to patent. This is so, because the protection of an intangible asset through IP would imply its publicity.

In today’s society, trade secrets play an increasingly relevant role within companies because they constitute a growth factor. Indeed, trade secrets encourage the development of new business models, increase levels of research and stimulate cross-border collaboration. In fact, a proper use of the information can result into a powerful market-weapon against competitors.

Trade secret’s special nature, fused with the undoubtedly value given by companies, explains justifiably its protection at an international level. In the European Union, most Member States already counted with a legal protection system of trade secret. Nevertheless, the resources available to combat the misappropriation of trade secrets were insufficient. This happened because the scope of protection of trade secrets varied among the different Member States.

In the absence of remedies, procedures and harmonized procedural measures aimed to protect trade secrets, companies of Member States felt increasingly more unprotected and exposed to unfair practices that favored the acquisition, use and disclosure of their trade secrets. This feeling increased due to recent developments, such as globalization and the increased use of information and communication technology. Added to this, any national measures and remedies did not prevent the disclosure of information in order to protect the confidentiality during legal proceedings.

In this context, the need to design a common system for trade secrets, giving place to the adoption of Directive 2016/943, of June 8, 2016, on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure .

In Spain, this directive has been transposed through the Law 1/2019, of February 20, of Trade Secrets (BOE of February 21, 2019), which will come into effect on March 13, 2019 .

The approval of this new Law constitutes a step forward to the culmination of a common protection system for trade secrets. In addition, Spain demonstrates that it is aligned with the rest of the Member States in the creation of an internal market free of borders.