Trade secret laws and regulations in Colombia

Does not apply for Colombia.

In Colombia, there are several applicable sources of law relating to trade secrets:

• Decision 486 of 2000 of the Andean Community of Nations, Common Regime on Industrial Property
• Law 256 of 1996 relating to unfair competition
• Criminal Code, articles 258, 308, 418, 419 and 429

Article 260 D486: An industrial secret shall be considered to be any undisclosed information within the lawful control of an individual person or legal entity that may be used for any productive, industrial, or commercial activity and that is capable of being transmitted to a third party, so long as that information:

1. is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
2. has commercial value because it is secret; and
3. has been the subject of reasonable measures by the person lawfully in control of the information, to keep it secret.

The information constituting an industrial secret may be related to the nature, characteristics, or purpose of the products, production methods or processes, or the means or forms of distribution or marketing of goods or rendering of services.

Yes. According to article 260° of Decision 486 mentioned above, the information must have been the subject of reasonable measures to keep it secret, such as the use of passwords, restricted access, safe keeping, and informing the recipient of the confidential character of the information.

Yes. According to article 264° of Decision 486, trade secrets are transferable and licensable as follows:

“Article 264 - Whoever legitimately owns a business secret may transmit or authorise the use to a third party. The authorised third party shall have the obligation not to disclose the business secret by any means, unless otherwise agreed upon with the person who transmitted or authorised the use of said secret (…)”

Yes. When the transfer or licensing is executed by a person other than the trade-secret owner, without his authorisation, those acts are considered acts of unfair competition according to Article 16 of Law 256 of 1996. Both parties in the transaction will be obliged to remedy the owner of the trade secret who transfers or licenses it as well as who receives it. 

These activities are also criminally punished. According to Article 308 of the Criminal Code, whoever uses, reveals or discloses a discovery, scientific invention, process or industrial or commercial application, brought to his knowledge by reason of his position, trade or profession and which must remain confidential, will incur a prison sentence of two to five years and a fine of twenty to two thousand current monthly legal minimum wages. The same penalty shall be incurred by anyone who unduly knows, copies or obtains a secret related to the discovery, scientific invention, industrial or commercial process or application.

There is no legal prohibition to co-ownership of trade secrets.

Article 262° of Decision 486 establishes the actions that constitute infringement of trade secrets, considering those actions as acts of unfair competition, as follows:

“Article 262° - Anyone shall have the possibility of preventing an industrial secret lawfully within their control from being disclosed to, acquired by, or used by third parties in a manner contrary to fair trade practices. Performance of any of the following acts in respect of an industrial secret shall be considered unfair competition:

1. using, without the authorisation of the person lawfully in control of that information, an industrial secret to which the third party had access under a confidentiality obligation resulting from a contractual or labour trade practice;
2. communicating or disclosing, without the consent of the personal lawfully in control of that information, the industrial secret referred in subsection a) with the intent of obtaining advantages for oneself or another party or of causing injury to the person in control of that information;
3. acquiring an industrial secret by means that are unlawful or contrary to fair practice practices;
4. using, communicating, or disclosing an industrial secret acquired in the way described in subsection c);
5. using an industrial secret obtained from another person, while knowing, or negligently failing to know, that the party who communicated the secret had acquired it by use of the means cited under subsection c), or did not have consent to communicate it from the person lawfully in control of that information;
6. communicating or disclosing an industrial secret obtained in the way described under subsection e), for the benefit of oneself or a third party or to injure the person lawfully in control of that industrial secret.

An industrial secret shall be considered to have been acquired by means contrary to fair trade practices where such acquisition is the result of industrial espionage, breach of contract or other obligations, breach of trust, breach of a duty of secrecy, or inducement to breach.”

Infringement of trade secrets is also punished under Article 16 of Law 256 of 1996:

Article 16. VIOLATION OF SECRETS. The disclosure or exploitation, without the authorisation of its owner, of industrial secrets or any other class of trade secrets to which legitimate access has been had but with a duty of confidentiality, or illegitimately, as a result of some of the behaviours foreseen in the following paragraph or in Article 18 [Infringement of the Law] of this law, is considered unfair. 

Likewise, the acquisition of secrets through espionage or similar procedures will also be considered unfair, without prejudice to the sanctions established by other regulations.

Yes. Trade secret owners can request an interim measure so that a judge can obtain or retain evidence. This can be achieved by the realisation of an inspective visit by the judge to the alleged offender.

Article 245° of Decision 486 establishes the faculty to request an interim measure in order to stop an alleged infringement, avoid its consequences, obtain or retain evidence, or ensure effectiveness of the action or compensation for damages.
There is no limited list of the interim measures that can be requested. For example, the confiscation or immobilization of products, the temporary clothing of the establishment, the confiscation of computers, all actions that may contribute to preserving the affected party. 

Article 248 of Decision 486 establishes that any interim measure executed without the intervention of the other party will be without effect if the infringement action is not initiated within ten days after the execution of the interim measure.

Financial compensation may be requested to remedy the infringement only through a substantive infringement claim, not as an interim measure.

No. The interim measures will be granted without the intervention of the other party and without hearings.

Financial compensation is calculated according to the damages effectively evidenced during the proceedings by the trade-secret holder, according to integral indemnity of emerging damages and loss of profit. In Colombia, there are no punitive damages.

Regardless if the claim is based on Decision 486 or on Law 256 of 1996, the statute of limitation will be two years from the moment the trade-secret owner knew of the infringement. 

If the holder of the secret did not have any knowledge of the infringement within two years, the action will have a limitation period of three years from the realisation of the infringement.

A conciliation proceeding will suspend the limitation period from the moment of its initiation to its termination. 

Publicity is one of the main principles that follows every proceeding in Colombia and, as a general rule, judicial proceedings are public. However, according to Article 24 of Law 1755, it is possible to state that trade secrets are legally reserved since they are protected by commercial or industrial secrecy. In that case, if the judicial proceeding is related to a trade secret, the parties can request that files be confidential so only they and the Court will have access to the documents. 

When a third party is involved, the procedural law (article 267 of the Colombian General Procedure Code) allows it to oppose the exhibition of documents that are its exclusive property when they enjoy legal reserve or the exhibition would cause prejudice to them. Such a request must be justified. The Court will decide the opposition and the third party must comply with the Court’s decision.

Interim measures must be obeyed until the judge ponders the evidence filed by both parties and the argumentation of the hearings to finally decide on an appropriate sentence.

In the case of overestimation of the damages, one that exceeds by 50% of the amount declared by the judge, this can result in a fine equivalent to 10% of the difference between the estimated amount and the proven amount. There is also a sanction in case of lack of proof of the claimed damages, which consists of 5% of the value claimed in the lawsuit whose claims were denied (Article 206 of the Civil Proceedings Code). This will happen in the same proceedings.

There is also the possibility to initiate an action for abusing the use of legal proceedings when the claim is obviously and manifestly initiated in bad faith. 

The Colombian Labour Statute does not state expressly any regulation regarding trade secrets. Nevertheless, it is advisable for employers to create internal policies focused on the protection of any confidential or reserved information (including trade secrets) by adding strong confidentiality clauses and non-disclosure agreements to employment contracts. It is also important that employers focus on providing trainings to employees in which they explain in detail the meaning of trade secrets, and the consequences in case of misuse in order to guarantee that employees are fully aware of the importance of duly protecting trade secrets.  

In accordance with the previous response, it is important to have strong internal policies and agreements stated in employment contracts or contract amendments that allow employers to take action in case some of their employees misuse trade secrets. Hence, it is advisable to establish in the employment contract that if an employee misuses or discloses without authorisation information that is considered a trade secret, this will be understood as serious misconduct that allows the employer to terminate the contract with fair cause.

In case employees do not comply with their confidentiality obligation or misuse reserved information labeled as trade secrets while the employment contract is ongoing, employers can terminate the contract with fair cause in case this non-compliance has been labeled as serious misconduct.  

However, once the contract has been terminated, employers cannot start any measures from the employment perspective. Nevertheless, if the parties had agreed to include in the employment contract penalties for revealing or misusing trade secrets after the termination of the contract, the employer can start civil, commercial or criminal actions.

In Colombia, there is still no vast regulation for the protection of whistleblowers. However, some companies have created internal mechanisms of protection in case an employee reports situations that may seriously affect the Company. Even though whistleblower protection is more focused on protecting people who disclose possible corruption acts, it is acceptable to establish protection mechanisms for employees who reveal possible infringements or misuse of trade secrets by other members of the organisation or third parties.  

This will depend on the dispositions stated on the commercial agreements. Hence, it is advisable that on employment contracts, employers include indemnity clauses in which it is stated that in case the employee misuses, discloses or infringes secrets of a third party (e.g. a client or supplier), they will keep the employer liable in case of any claim.   

Generally, the most usual practice to protect trade secrets under Colombian law is the execution of a non-disclosure agreement (“NDA”) or the inclusion of enforceable non-disclosure clauses in supply or similar agreements. Although this is a common practice, trade secrets are also protected nationally by Decision 486 of the Andean Community (the “Decision”). According to article 260 of the Decision, trade secrets are protected as long as they can be considered as such under the definition provided by the Decision as stated above in the third item of this document (How are trade secrets defined?), even if the parties don't agree explicitly on their protection. 

Therefore, as long as any information disclosed to another party in a contractual relationship can be defined as the latter, it is considered a trade secret and is protected by Colombian law. Consequently, in the event the disclosed information is used to the disclosing party's detriment, such party is liable for any tort caused by this disclosure.

Additionally and as explained above, under Law 256 of 1996 the unlawful or wrongful disclosure of trade secrets is considered as an antitrust act and subject to legal sanctions[1]. Nonetheless, the affected party may conduct the procedural laws aimed at the judicial declaration of any unlawful behaviour whose purpose is to require the offender to remove the effects produced on the market by the disclosure and to pay compensation for the damages caused.[2] 

Refer to the second item of the Dealings in and ownership of Trade Secrets section of this document since the use, disclosure, divulgation, or discovery of scientific intentions, industrial or commercial process, that must remain confidential, and which is acquired by means of a particular position, profession, or role, is punishable by criminal Colombian law.[3] 

[1] Note article 16, Law 256 of 1996.
[2] Note article 20, Law 256 of 1996. 
[3] Note article 308, Colombian Criminal Code.

As was mentioned above, trade secrets are protected as long as they fit the definition of the Decision regarding trade secrets. Furthermore, according to the Decision, the parties cannot turn non-confidential information into confidential information by a contractual agreement. This means that in an agreement, one of the parties cannot use a non-disclosure clause to protect information that is considered public or not secret. If any party aims to use a non-disclosure clause or an independent NDA to protect information that is not considered secret under the definition of the Decision, the other party is not required to treat it as confidential. Because of such legal rules, a typical pitfall on protecting trade secrets is to include non-confidential with confidential information, assuming that the other party has an obligation to treat it as such.

The Decision is a regional regulatory body, which is enforceable in any country that has incorporated such a rule of law into its local regimes. The members of the Andean Community are required to apply the Decisions’ dispositions into their national codes and their authorities are required to issue their opinions and binding decisions under such standards. Nonetheless, if NDAs or clauses are executed with an international element from a country excluded from the Decision, the enforceability of the disposition will be determined by the text included in the clause/agreement, the interpretation given to such clauses, the applicable law, and whether there is an arbitration clause or not. 

Note that the antitrust regime is only applicable if the Colombian market is affected or if the effect of any unlawful act is extended on the national market. Additionally, the criminal liability is only applicable to Colombian jurisdiction.

Under Colombian law there is not a particular disposition or rule of law regarding the execution of penalty clauses under trade-secret agreements or non-disclosure clauses.  Nonetheless, Colombian law allows the inclusion and enforceability of penalty clauses for breaches of contract. 

Article 1592 of the Colombian Civil Code defines the penalty clause as “any clause in which a person, in order to ensure the fulfillment of an obligation, is subject to a penalty consisting of providing or doing something in the event of breach of delay of an obligation”. It is common for parties to include such mechanisms in NDAs or non-disclosure clauses in order to anticipate the value of damage. Nevertheless, under Colombian law, the execution of penalty clauses follows a compensatory purpose. Therefore, if there is damage exceeding the stipulated fine, such damage must be proved and can be claimed, but the affected party must waive the application of the penalty clause as the claim of both fines could be considered unlawful enrichment restricted by local law.