This is the 13th in a series of articles written by members of our International Trade Secrets Group, highlighting points of note regarding the protection of Trade Secrets in various jurisdictions. In this article we review the position in Spain.
In Spain, the Trade Secrets Directive (the "Directive") was implemented in March 2019 by the Trade Secrets Act 2019 (the “Spanish TS Act"). Prior to the Directive, the legal framework of trade secrets in Spain was scarce and fragmented, although the definition of trade secrets of the Directive had already been adopted through the concept of 'undisclosed information' contained in Article 39 of the TRIPS Agreement. Prior to the Directive, in Spain the legitimate owner of a trade secret had a set of legal remedies against acts of unlawful acquisition, use and disclosure, but the scope and requirements for these acts to be deemed unlawful and the exceptions to unlawfulness were unclear. The set of remedies provided by the lawmaker to the legitimate owner of a trade secret comprised the right to an injunction, the recall of the infringing products and compensation for damages, although the lack of clear rules for the preservation of confidentiality of trade secrets in the course of legal proceedings often was a dissuasive factor to enforce them against infringers.
In this context, the transposition of the Directive by the Spanish TS Act has been welcomed by commentators and the relevant sectors involved in the design, creation, protection, management, monetisation and enforcement of trade secrets in Spain, including the Judiciary, as a decisive step forward to achieve an acceptable level of civil redress and legal certainty.
The Directive provides a de minimis threshold of protection. In this article we will emphasize those aspects in which the Spanish TS Act has provided the trade secret holder with more far-reaching protection against the unlawful acquisition, use or disclosure of trade secrets. The first two aspects are of a substantive nature, whilst the other two contributions of the Spanish lawmaker to a more robust protection are of a procedural nature.
In this context, the Spanish TS Act contains a section entitled “trade secrets as an object of property” comprising four provisions of substantive character. The first provision sets forth that trade secrets are assignable. The second rule lays down the terms and conditions to be applied to co-ownership of trade secrets in the absence of an agreement entered in to between the co-owners. Unless otherwise agreed upon by the co-owners each one of them shall be entitled to individually use the trade secret; to carry out any acts intended to comply with the requirements for its protection and to individually institute infringement proceedings before the courts against third parties with the only requirement of a notification to be sent to the other co-owners. However, consensus among co-owners is required for the assignment or licensing out of the trade secret to a third party.
A third article highlights that a trade secret may be licensed in whole or part under the terms and conditions to be decided between the parties, and provides the legal framework applicable to contractual licenses in the event that a material aspect of the license agreement has not been covered by the parties. Unless otherwise agreed upon by the parties,
a) the license shall be deemed non-exclusive and the licensor shall be allowed to exploit the trade secret.
b) the licensee shall be allowed to carry out the complete bundle of acts which in the absence of a license would constitute trade secret infringement.
c) the licensee shall neither be allowed to assign the license agreement to third parties nor to grant sublicenses to third parties.
d) the licensee and sublicensee shall be forced to take whatever measures are necessary to avoid the infringement of the trade secret.
According to the Directive, “the production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes”, shall be considered an unlawful use of a trade secret “where the person carrying out such activities knew, or ought, under the circumstances, to have known, that the trade secret was used unlawfully”. For these purposes, “infringing goods” means “goods, the design, characteristics, functioning, production process or marketing of which significantly benefits from trade secrets unlawfully acquired, used or disclosed”.
Even though the Directive does not expressly mention that services, and not only products, are included in the definition of “infringing goods”, recital (27) emphasizes that the protection provided by the Directive is also applicable to “the provision of services”. However, with the objective of avoiding any doubt on the interpretation of the concept of infringing goods and its applicability to the provision of services, the Spanish TS Act has defined “infringing goods” as “goods or services, the design, characteristics, functioning, production process or marketing of which significantly benefits from trade secrets unlawfully acquired, used or disclosed”.