Unfair Competition: The Violation of Trade Secrets in Spain

The violation of trade secrets is regulated in Spain under Article 13 of the Law of Unfair Competition. Acts of exploitation for personal benefit of valuable and confidential information that has been accessed (for example, while working in a company or as a result of commercial relations between entities that participate in the market) can qualify within the category of violation of business rights and under specific circumstances.

The violation of secrets

One of the mechanisms of protection of an employer against the conducts described above is Article 13 of Law 3/1991, dated January 10, on Unfair Competition (Ley de Competencia Desleal, hereinafter, LCD), which regulates the so-called “acts of violation of secrets“. The article defines this behaviour as: “1. The acts of disclosure or exploitation of trade secrets, without authorization from its owner, of industrial secrets or any other kind of business secrets which has been obtained legitimately but with the duty of confidentiality, or those to which access has been obtained illegitimately by means provided for in the following paragraph or under Article 14; 2. The acquisition of the secrets by means of espionage or similar procedures is likewise considered unfair; 3. The persecution of violations of secrets contemplated in the previous sections shall not require the presence of the requirements set in Article 2. However, it is required that the violation has been made with the purpose of obtaining a benefit for oneself or for a third party, or in order to harm the owner of the trade secret.

Requirements for violation of secrets

Conduct

Article 13 of the LCD requires the existence of a breach of secrecy, which occurs by one of the following conduct: disclosure, exploitation or acquisition by espionage.

On the other hand, according to the actual wording of the article, the LCD does not require that this type of conduct be carried out in the market and with competitive aims. This means that the circumstances under which the act in question was carried out, could prove to be objectively suitable for promoting or ensuring the distribution of one’s own or third party’s services in the market.

Secret Information

It is necessary that the information that is violated be considered a secret. This concept encompasses not only industrial information or information regarding the way the product is manufactured or/and the implementation of a service delivery process, but also the professional secrets of the internal organization and the relationships between customers and distributors, also known as know-how. In addition, the doctrine demands a triple requirement for information to be considered a secret:

  • it must not be generally known or easily accessible;
  • it must have commercial value, which justifies it to be kept as a secret; and,
  • protection measures must be adopted by its legitimate owner to keep it a secret.

Method by which it has been obtained

Information protected under Article 13 of the LCD can be obtained illegitimately (for example, by means of espionage), which is considered an unfair practice per se, or in a legitimate way, but with a duty of confidentiality (for example, when it comes to workers who, due to their individual legal relationship, derive an implicit duty of confidentiality).

Intention

Finally, in the case of violation of secrets, it must be carried out with the intention of obtaining a benefit for oneself or for a third party, or in order to harm the owner of the trade secret.

Conclusion

The requirements for finding a violation of trade secrets listed in this article are cumulative. Consequently, in practice, the assessment of this type of conduct by courts is infrequent. In addition, the basic principle of supremacy of the free exercise of competition and of the freedom of entrepreneurship against interventionism and the judicial protection of private interests must be borne in mind. These doctrines and jurisprudence interpret the infliction of damage among competitors involved in the market as normal, and even healthy, because that is precisely the object of business activity in competition. Hence, only those truly serious and malicious conducts can be held unfair.

This article is not considered as legal advice

Rosario Rodríguez

Rosario Rodríguez graduated from the University of Navarra with a Law degree. Her practice areas are business law, company law and commercial contracts in Spain. For any further enquiries please Contact us