News

Confidentiality regulations in Mexico

Firstly, it should be mentioned that everyone is required to respect the rights of others, therefore, pursuant to the Intellectual Property Law (Ley de la Propiedad Industrial – “LPI”), certain confidential information, which comprises a trade secret, consists of a right and, as such, must be respected by others.

Therefore it is of the utmost importance that those who, due to the nature of their business, industry or commerce, possess and process confidential information and documentation related to their products, services and transactions that constitute trade secrets protect said information through confidentiality agreements.

Of course, not all confidential information can be considered trade secrets.

Likewise, we would point out provisions in addition to those in the LPI governing this area, such as, for example, Articles 201 and 211 of the existing Federal Criminal Code that penalizes and fines, when appropriate, those who, in certain circumstances, reveal reserved secrets or communication, and Section 8 of Article 13 of the Federal Employment Law which sets out employees obligation to scrupulously keep technical, business and product manufacturing secrets, as well as reserved administrative matters, whose disclosure could be damaging to the employer.

Therefore, confidentiality agreements are essential and a condition precedent for businesses entering into and maintaining labor relationships with employees, as well as in business dealings with third parties (such as suppliers).

They acknowledge that confidential information may be provided to them or come to their notice in the course of providing services and that they are aware that if they breach the duties undertaken in the corresponding confidentiality agreement they may cause irreparable damage to the business concerned, the amount of would be difficult to calculate, and that they will be liable to pay the penalties established which include, among others, those set out in the Criminal Code and the LPI.

Finally, it is also important for companies to enter into mutual confidentiality agreements when involved in different types of projects such as, for example, mergers and acquisitions, whereby the parties mutually acknowledge that each will have access to confidential information belonging to the other party, with undertakings from both sides to supervise and guarantee compliance with the duty to secrecy contained in the corresponding agreement by their employees, officials and other persons from their organizations who have access to such confidential information.

We can conclude that confidentiality agreements have become a basic tool that should be used correctly by businesses for handling and storing confidential information which constitutes trade secrets.

Carmen Sánchez-Puelles