OFFENCE OF DISCOVERY & DISCLOSURE OF SECRETS IN SPAIN

Legal Regulation

The so-called “trade secret” (classified by the Spanish Supreme Court as the offence of discovery or disclosure of company secrets) is criminalised in Articles 278 and 279 of the Spanish Criminal Code, falling within the category of offences against property and the socio-economic order, specifically in the area relating to the market and consumers.

Offences against the market and consumers may be defined as socio-economic crimes whose legal regulation aims to punish the most serious conduct affecting the market and consumers, protecting the system of price formation. These offences are contained in Title XIII of Book II of the Criminal Code, entitled “Offences against Property and the Socio-Economic Order.” Within this title, Chapter XI, entitled “Offences relating to Intellectual and Industrial Property, the Market and Consumers,” is divided into three sections, the third of which—Articles 278 to 286—regulates offences relating to the market and consumers.

Consumer protection operates within a free-market system proclaimed by the Spanish Constitution in Article 38. However, the Constitution does not leave consumers defenceless in the face of the risks of commercial freedom. Article 51 establishes that public authorities shall guarantee the protection of consumers and users, safeguarding—through effective procedures—their safety, health, and legitimate economic interests. Furthermore, public authorities shall promote consumer information and education, encourage consumer organisations, and consult them on matters affecting them, in accordance with the law. Finally, the Constitution requires that domestic trade and the system of authorisation for commercial products be regulated by law in accordance with the provisions protecting consumer information.

These general principles are developed in numerous legal provisions, including Law 44/2006 of 29 December on the improvement of consumer protection, Royal Legislative Decree 1/2007 of 16 November approving the consolidated text of the General Law for the Defence of Consumers and Users, Law 22/2007 of 11 July on the distance marketing of financial services to consumers, Law 29/2006 of 26 July on guarantees and the rational use of medicines and healthcare products, Law 47/2002 of 19 December amending the Retail Trade Regulation Act, Law 34/1998 of 11 November on Advertising, and Law 16/2011 of 24 June on consumer credit agreements, in addition to other implementing and complementary regulations enacted by both the State and the Autonomous Communities, which hold transferred competences in this area.

At the European level, the Recommendation on economic crime adopted by the Committee of Ministers of the Council of Europe on 25 June 1981 recommends the criminalisation of several economic offences, including those affecting consumers. In particular, it refers to the adulteration of goods, misleading presentation, offences against hygiene and public health, abuse of consumer inexperience, unfair competition—especially the corruption of employees of competing companies—and misleading advertising.

Furthermore, numerous European Union Directives aim to harmonise Member States’ legislation regarding consumer protection mechanisms, including Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers’ interests, Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services, which amended Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC, as well as Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market.

In Organic Law 5/2010 of 22 June, which amended Organic Law 10/1995 of 23 November (the Criminal Code), the explanatory memorandum sets out the reasons for modifying certain aspects of these offences. Taking as reference Council Directive 2003/06/EC of 28 January 2003 on insider dealing and market manipulation, reforms were introduced in the field of offences relating to the market and consumers. Thus, the offence known as investor fraud was incorporated, criminalising administrators of companies issuing securities traded on financial markets who falsify information regarding their resources, activities, or present or future business in order to attract investors or obtain credit or loans.

Likewise, the law punishes the dissemination of news or rumours about companies containing false data intended to alter or maintain the trading price of a financial instrument, as well as conduct by those who, using insider information, carry out transactions or issue trading orders that provide or may provide false or misleading signals regarding the supply, demand, or price of financial instruments. It also punishes agreements between persons to maintain the price of one or more financial instruments at an abnormal or artificial level, as well as collusion aimed at securing a dominant position over the supply or demand of a financial instrument.

Organic Law 1/2015 of 30 March, however, left unchanged all the provisions included in Title XIII, which will be the subject of this analysis.

Under the heading “Offences relating to the market and consumers,” the Criminal Code groups together a series of heterogeneous offences that are difficult to unify under a single protected legal interest beyond the broad concept of the socio-economic order. In any case, as Martínez-Buján Pérez points out, what is protected here is freedom of competition, as well as the interest of consumers in ensuring that products and services are assigned their proper value. The perpetrator of such offences may generally be any person, unless the law specifies otherwise, whereas the victim will be the holder of the commercial, economic, or consumer interest harmed by the criminal conduct.

What Is a Trade Secret?

Given the wide variety of information that may constitute a “trade secret,” it is not appropriate to provide a rigid definition. In general terms, however, it refers to information whose confidentiality must be preserved by those who know it due to their specific relationship with the company. This includes not only information relating to technical production processes, but also information concerning the commercial or organisational aspects of the business, such as knowledge, information, techniques, organisational structures, or strategies within the business sphere that the company intends to keep confidential.

Spanish case law and leading legal doctrine have recognised as trade secrets not only client lists (which are often the most frequently violated form of business information), but also supplier lists, techniques for exploiting or marketing a product, financial strategies, pricing techniques and discount policies, product acquisition prices, profit margins, peak sales time slots, among many others.

Likewise, the concept includes information concerning the internal organisation and relations of the company, relating to labour matters, operational functioning, and corporate plans. Examples include commercial expansion projects, plans to launch new products, internal or external restructuring projects (such as mergers, takeover bids, capital increases, or dividend distributions), projects concerning the conclusion of contracts, data relating to bids in auctions or tenders, minimum conditions to be accepted in future negotiations, accounting and financial information, relationships with employees, production volume, financial or market analyses, lists of unpaid debts, or the ineffectiveness of a particular advertising policy, among many other possible cases.

Four main characteristics of trade secrets can be identified:

1. Confidentiality – the information is intended to remain secret.

2. Exclusivity – it belongs to a specific company.

3. Economic value – it provides an economic advantage or profitability.

4. Legality – the activity to which it relates must be lawful in order to receive legal protection.

The foundation of trade secret protection lies in the duty of loyalty owed by those who become aware of the secret through a legal or contractual relationship with the company. The specific legal interest protected is therefore fair competition between companies.

Trade secrets are usually classified into three categories:

• Technical or industrial secrets (relating to the company’s activity or production process);

• Commercial secrets (such as client lists or marketing strategies);

• Organisational secrets (relating to labour matters, internal functioning, and corporate planning).

Trade secrets may be materialised in any type of medium, whether paper or electronic, in original form or copies, and even through verbal communication. They may include figures, lists, accounting entries, organisational charts, plans, internal memoranda, and similar documents.

Regarding the duration of the obligation to maintain secrecy, it will depend on the source of the duty of confidentiality, whether derived from legal provisions or contractual obligations.

Moreover, the violation of trade secrets constitutes an act of unfair competition under Law 3/1991 of 10 January on Unfair Competition. Article 13 of this law provides that:

“The disclosure or exploitation, without the authorisation of its owner, of industrial secrets or any other type of business secrets to which access has been obtained legitimately but subject to a duty of confidentiality, or illegitimately, shall be considered unfair.”

According to Article 18 of the same law, the following actions may be brought against acts of unfair competition:

1. An action seeking a declaration that the act is unfair, if the disturbance caused by it persists.

2. An action for cessation or prohibition of the act, if it has not yet been carried out.

3. An action for the removal of the effects produced by the act.

4. An action for rectification of misleading, incorrect, or false information.

5. An action for compensation for damages, if the offender acted with intent or negligence; such compensation may include publication of the judgment.

6. An action for unjust enrichment, applicable only when the act harms a legal position protected by an exclusive right or another right of similar economic content.

Article 22 further specifies that proceedings concerning unfair competition shall be conducted in accordance with the ordinary procedure established by the Civil Procedure Act.

Therefore, without prejudice to these civil actions, criminal punishment is provided for those who come into contact with company secrets and breach their duty of confidentiality and loyalty. Criminal liability extends to company administrators (formerly under Articles 127.2 of the Public Limited Companies Act and 61.2 of the Limited Liability Companies Act, now regulated by the Companies Act), employees who learn such secrets in the course of their duties, workers of other companies interacting with the company (such as security or supplier companies), and third parties who become aware of the secrets due to legal reasons (for example, public officials).

As a special offence, it can only be committed by the specific circle of persons described above. Any outsider (extraneus) who participates may be liable as a participant (instigator, necessary accomplice, or accessory), depending on the nature of their involvement.

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