Market evolution has produced new, more complex, unfair behaviors. These were already contemplated in the Law on Unfair Competition. These activities are also normally controlled by the Spanish Unfair Competition Law. Protection is now transferred from consumers to competitors and to market competition.

1) Exploitation of third party reputation

Section 12 of the Law condemns taking advantage of any third party’s reputation.  The Law refers to “model” or “system.” Case Law also applies Section 12 when the party refers to his former market connections with a competitor.

2) Breach of Secret

Section 13 of LCD condemns breach of business, industrial or commercial secrets, for one’s profit or damaging third parties. Former laws partially foresaw these practices.

The Spanish Intellectual Property Law sets forth that any creation of an employee under the employment contract belongs to the company. Therefore the employee has no industrial and intellectual property on the creations. But the Law on Unfair Competition extends the protection to more complex examples, such as “business secrets.”

2.1) What does industrial/business secret mean?

  • Industrial secret means the way a service is provided, the composition, properties or the way of manufacturing a product. Business secret is the information about strategy or organization of a company.
  • Business secret, or trade secret considered to be the private know-how, necessary to manufacture or commercialize a product, or to organize a company with a competitive advantage. But it should be previously defined in documents, software, photographs, plans or machines.
  • Any information is business secret if it is protected, if it has competitive value and measures to keep its secrecy are adopted.

2.2) Professional Knowledge

On the other hand the professional ability, experience and know how or goodwill held by an employee are not business secrets, even if the information was acquired when we was a company’s employee. But the knowledge that is not memorized is considered business a secret.

2.3) Disclosure

The trade secret will be violated only if it is disclosed to be used. If the secret was illegally transferred, its use and economic profit are deemed existent, unless the contrary is proven.

2.4) Case Law defines secret and its violation

The Spanish Supreme Court and the Courts of Appeal have defined what is a business secret. The reserved data, information, and ideas which provide an advantage over competitors, the disclosure of which would cause damage to the company.

The Courts also consider a business secret the industrial, commercial or organizational information (a) generally unknown and not accessible for those acting in commercial circles where it is used; (b) with commercial value; (c) that is reasonably protected to be kept secret.



3) Breach of Contract

Section 14 of the Law bans certain acts against the competitors’ contractual connections. The article emphasizes the most significant agreements: employees, suppliers or clients. But it is also applicable to other contracts, such as distribution, franchise, and license.

The Law on Unfair Competition goes further than the Worker’s Statute (which allows non-competition clauses once the employee’s contract has expired, but with many limitations). The Law Unfair Competition forbids attracting employees, suppliers or clients without any limitation, when it is unfair, as further defined.


3.1) Inducement to infringe basic contractual obligations

Behavior is deemed unfair when it leads someone to break his basic contractual obligations. The “tempted” may be offered an advantage or be deceived. The mere offer is not considered to be inducement.

3.2) Inducement to termination of a contract

It is forbidden to influence someone to terminate his contract in certain circumstances.

Inducement to termination is not unfair in itself: it has to be the reason of termination. The law requires that the contract be terminated with deceit, or disclosure of secret information, or aiming to harm the position of a competitor.

Attraction of employees

Attraction is not considered unfair in itself. The Law does never forbid an employee to continue his activity elsewhere.  It is unfair competition, however, to seriously disrupt a competitor’s activity: to attract the majority or all employees; to use ex-employees to attract key employees, or to contact clients without disclosing that they do not work for the same company anymore.

Clients attraction

It is unfair competition to attract clients when the standard pattern of competition is infringed: breaching a non-competition clause or using secret client lists, when this is done from the inside of the company.