Trade secrets and data protection – Part 2

Last November we published the first part on trade secrets and data protection. In this post, we introduced the subject by explaining trade secrets and the law that protects them. Today we are going to finish exploring the topic and shed some more light on it. Let’s go!

What is a violation of secrets?

A violation of trade secrets is considered to be when a person or entity accesses a company’s confidential information without authorisation and uses it to obtain economic benefits or competitive advantages.

This can range from disclosing confidential information to third parties, using trade secrets to directly compete with the company, or even misappropriating confidential information to sell it to another company.

Steps to protect your trade secrets

When guaranteeing the protection of trade secrets, a series of steps should be followed, such as those indicated below:

1.Establish confidentiality agreements

Establishing confidentiality agreements with employees and third parties (suppliers) is key to maintaining internal order and, if necessary, taking legal measures to penalise misuse of the company’s confidential information.

2. Control access

Many companies take into account the physical security of data, but nowadays most of that data is found in the digital framework.  For this reason, companies must incorporate relevant protection measures in an increasingly digital world.

3. Define confidential information

When establishing a confidentiality agreement, it is necessary to regulate what is considered confidential information in a company. To do so, a thorough analysis must be carried out that identifies the secrets and associated risks.

4. Provide training

Training is also essential to avoid data breaches to the outside. Therefore, employees must be trained on how to handle the company’s data.

5. Make special protective equipment

It is important to delegate certain responsibilities to a security and data protection officer. This person will therefore be responsible for ensuring said protection.

6. Continue making progress

Many companies focus on data protection when it is already too late. It is important to start working on this immediately and continue to add projects and all types of actions to ensure the full protection of data. In terms of data protection, this is known as proactive responsibility.

7. Make protection the priority 

Cyber threats are currently a significant problem at the business level. That is why taking action tomorrow is not good enough; data protection on the Internet must be handled straight away. Failing to do so, companies will jeopardise their finances and their reputation.

This is key; protecting trade secrets in a company is not only a preventive measure, but also a measure of future success. If you have questions or wish to know more about any of this information, do not hesitate to contact us. At Bacaria we can advise you.

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Trade secrets and data protection – Part 1

A company’s data is one of its most valuable assets. And information is power. Today we are going to discuss trade secrets and the Law on Trade Secrets, shedding some light on the topic and addressing the protection of data they generate.

Defining trade secrets

Trade secrets are confidential information with economic value for a company and they can be used to gain competitive advantage in the market.

The definition given by the Law on Trade Secrets (LSE) is very broad, whereby a trade secret is considered to be any information or knowledge, including technological, scientific, industrial, commercial, organisational or financial knowledge. It can include designs, formulas, processes, business strategies, customer lists and much more.

To be protected as a trade secret, the knowledge or information must be secret, meaning that it is only known by a limited number of people and it cannot be deduced by industry experts through observation or reverse engineering.

Law that protects secrets

The Law on Trade Secrets aims to protect and guarantee the confidentiality of business information that has economic value and is kept secret by the company. This law states that trade secret is considered to be all information that:

1. Has business and economic value.
2. Is not in the public domain.
3. Has been established only for employees or owners of the company, having sufficient protection measures.

The LSE will only apply when it can be proven that the company has adopted specific measures to reinforce the security of the information or knowledge to be protected. In particular, the protection of companies must be based on the following pillars:

– Identification of information or knowledge considered to be sensitive.
– Adoption of security measures that guarantee security.
– Preventive legal measures such as the signing of confidentiality agreements.
– Reactive measures such as the implementation of action protocols when a violation of security measures is detected.

The Law on Trade Secrets states that the unauthorised disclosure, collection and use of information related to trade secrets will be considered a crime.

In the event of trade secret violation, the company affected may sue the offender and seek an injunction, as well as compensation for damages incurred. Ultimately, the purpose of this law is to protect companies against the violation of their confidential information and ensure the right to maintain trade secret confidentiality.

This is the end of the first part; in future posts we will discuss trade secret violations from a practical perspective.