In Central America, trade secrets are generally regulated under industrial property laws, within the scope of repression of unfair competition. Guatemala, El Salvador, Honduras, Nicaragua and Panama regulate trade secrets in their laws on industrial property, while Costa Rica has a specific Law to deal with this—the Law on Undisclosed Information.

Across all the national legislations in the region, we find a similar and general definition for “trade secret.” Subject to protection as a trade secret is any information:

1. with a commercial value,
2. which is not generally known or readily accessible to persons who belong to the circles in which such information is normally used, and
3. whose lawful owner has taken reasonable measures to keep it secret.

All Central American countries have the same general provisions regarding the requirements for protection of industrial property that is considered a trade secret and measures to be taken against infractions, with a few differences. For example, in Costa Rica, the Law on Undisclosed Information regulates a type of repository (deposit) of material supports on which the undisclosed information is contained. The repository is guarded by the Registry of Industrial Property; despite the existence of a repository, this is rarely used  . Honduras, on the other hand, lacks a specific regulation governing the applicability and enforcement of trade secrets.

Regarding the enforcement of trade secrets in the region, in all countries it is possible to initiate both civil and criminal law procedures.

In most of Central America, the regulation on trade secrets is limited, and there are no clear procedures for enforcement. That is why protection of information by classifying it a trade secret is not commonly used here.

Case law in the region—a recent example

Without complete regulation, trade secrets remain widely untried by judges. A recent judgment in Guatemala related to trade secrets, was issued by the Constitutional Court (the highest court in the country) in 2019.

The court ruled in the case of a former employee who was sued for breach of a non-disclosure and non-compete agreement; the court had to determine if the agreement was sufficient to prove the existence of a trade secret; it also analyzed compliance of each element necessary for the information to be considered a trade secret.

The Court determined that: (i) adoption of a confidentiality clause does constitute part of the necessary measures for the protection of a trade secret; however, (ii) the information that the defendant had could not be subject to protection as a trade secret, because: (a) it was obtained before the beginning of the labor relationship with the plaintiff entity; and (b) the information did not comply with the presupposition established in Guatemala’s Industrial Property Law that such information must not be generally known or easily accessible to the persons belonging to the circle in which such information is used.

Trade secrets still have a lot of potential for development in the region, and it is essential to explore the concept further and look for ways to develop its application.