Earlier this year, trade secrets became explicitly protected under Spanish national law when EU Directive (2016/943/EU) became part of Spain law. Before Spain incorporated this EU Directive on trade secrets, it did not have a consistent definition of the term “trade secrets.” In addition to this new Spain law providing a consistent definition for trade secrets, it provides clear protection of trade secrets in Spain for the first time. A trade secret in Spain is now defined as secret information, unknown to those who usually handle such kinds of information and not readily accessible. This information also must have commercial value precisely because it is secret. Lastly, the party asserting its trade secret rights to the information must have done what it could to reasonably keep its trade secret information a secret. In other words, Spain’s trade secret law now lines up with much of the rest of the developed world.
Spain’s new trade secret law creates economic value for companies that hold trade secrets. Moreover, the recognition of the special value of trade secrets will no doubt help to promote and increase innovation by Spanish companies. Investments made by Spanish companies in research and development will not only be protected, they will be a factor in company competitiveness and value.
As mentioned above, for a company to be able to invoke the protection of Spain’s new trade secret law, it must have made reasonable efforts to keep the information secret. Fulfilling this “reasonable effort” requirement will be important for companies and they must set up policies and procedures and engage in best practices for doing so.
The new trade secret law will also impact employee contracts as it is extremely likely that a company will need trade secret protection provisions in its employee contracts to be deemed to have made reasonable efforts to protect its trade secrets. If your existing employee contracts with your Spain employees do not explicitly make clear that they are never to reveal (or even put at risk) your company’s trade secrets, you should seriously consider revising your employment contracts now. You should also consider adding trade secret protection language to any of your other contracts — especially your vendor agreements — with any company that may gain access to your trade secrets.
Spain just took a big step in establishing a system for protecting trade secrets. Your company now must take the next step to ensure that it can take advantage of this new system.
This post was written by Susan Dumke, an associate attorney in the Madrid office of our affiliated Spanish law firm.