Trade secret

A trade secret may be transferred or its use may be authorized to a third party, either through a license agreement or a transfer agreement.

The protection of trade secrets has the advantage of not being subject to time limits. Patents, as mentioned above, have a term of up to 20 years. Therefore, the protection of trade secrets continues indefinitely as long as the secret is not disclosed to the public.

Trade secrets do not involve registration costs. However, the costs of keeping the information confidential can be high depending on its importance and the means used. Trade secrets have an immediate effect. There is no need to wait for a deadline or a decision by an agency

In view of the above, and in order to maintain the secrecy of the company’s strategic information, several measures can be taken, the most common being:

• Sign confidentiality agreements with the organization’s employees, as well as with suppliers and customers where necessary.
• Identify, classify, and store information in physical spaces with restricted access and security measures.
• Logical environment measures:
• Information encryption.
• User policies.
• Definition of security environments.
• Information exchange control systems.
• Antivirus.
• Business continuity plan.
• Establishment of organizational and management measures for the identification and control of information.

In this regard, it is advisable to use ISO 17799, the standard for good practices in information security management, as a reference.

In general, access to trade secrets is considered unlawful when it has been obtained through espionage, similar procedures, inducement to breach a contract, etc. Furthermore, the violation of secrecy by the third party must have been carried out with the aim or intention of obtaining a benefit or harming the owner of the trade secret.

Although trade secrets are not regulated by a specific law, there are legal provisions that address this issue:

• The Unfair Competition Law considers it unfair to disclose trade secrets, without the owner’s authorization, to those who have had legitimate access to them but are bound by a duty of confidentiality, or to those who have obtained them illegitimately.
• The Criminal Code establishes prison sentences for those who disclose a trade secret that they were contractually obliged to keep confidential

The company that owns the information considered to be a trade secret does not have any title proving its exclusivity with regard to that information, as it cannot prevent any third party from arriving at the same result and exploiting it freely.

However, the obligation of secrecy that must be maintained by both employees and third parties related to the company who have access to the secret information must be reflected in the employment contract or confidentiality agreement.

By signing these agreements, the exchange of information that may be considered a trade secret will be permitted, establishing the obligations and responsibilities regarding the handling of the information.

Patent protection is acquired through a legal process.

• The exclusive right to exploit a patent is valid for 20 years, and for a utility model, 10 years.
• It prevents third parties from using the patent commercially.
• It is an exclusive right, and the owner may defend the patent against any infringement thereof.

No legal procedure is necessary for trade secrets; it is sufficient to take the necessary measures to prevent their disclosure.

• Protection is indefinite, provided that the necessary means are applied to prevent disclosure of the secret.
• Its protection does not confer the right to prevent third parties from using it.
• It is more difficult to maintain and defend trade secrets because they are not granted as an exclusive right.

While trade secrets refer to any technical knowledge that, due to its competitive value for the company, the entrepreneur wishes to keep hidden, know-how refers to expertise, that is, the set of knowledge and activities developed by a company or person, acquired through experience and research, and which is difficult for third parties to imitate. Therefore, unlike trade secrets, know-how is not fundamentally characterized by secrecy, since the fact that it is disclosed does not mean that it ceases to be considered know-how.

There are a number of factors to consider when determining whether information is likely to be considered a trade secret:

• Decide to what extent the information possessed is known outside the company.
• Determine the extent to which the company’s employees and any third parties involved in its handling are aware of this information.
• The protective measures that have been taken to keep it secret.
• Determine the economic value it may have for the company and its competitors.
• Assess the expense and effort that the company has invested in developing and obtaining the information.

There are a number of factors to consider when determining whether information is likely to be considered a trade secret:

• Decide to what extent the information is known outside the company.
• Determine the extent of knowledge of this information by company employees and any third parties involved in its handling.
• The protective measures that have been taken to keep it secret.
• Determine the economic value it may have for the company and its competitors.
• Assess the expense and effort that the company has invested in developing and obtaining the information.

A trade secret is defined as any technical knowledge about ideas, products, or industrial processes that, due to their competitive value to the company, the entrepreneur wants to keep hidden.

A trade secret is a broad concept that encompasses:

• Trade secrets.
• Industrial secrets.

Case law doctrine understands that for information to be considered a trade secret, it must meet the following requirements:

• It must be secret, in the sense that it is not known or easily accessible to persons within the circles in which the type of information in question is normally used.
• It must be substantial, i.e., it must be information of interest or relevance.
• It must have commercial value or represent a competitive advantage due to its secret nature.
• It must have been subject to reasonable measures to keep it secret, taken by the person who legitimately controls it.

A trade secret is defined as a set of knowledge and information that is not accessible to the general public and that is essential for: the manufacture or marketing of products; the provision of services to the administrative or financial organization of the company; and that gives a competitive advantage in the market to those who possess such information, preventing its disclosure and striving to preserve it.