As business increasingly becomes digitised, trade secret laws are vital to protect companies from theft of valuable technical know-how, business operation manuals, recipes and formulae, customer and supplier information, new products or business models, special techniques or any confidential business information (for example lists of suppliers and clients, sales methods, distribution methods, advertising strategies, manufacturing processes, consumer profiles, etc). ASEAN governments have recognised the importance of trade secret laws to the overall innovation ecosystem.
The unauthorised use of such information by anyone other than the owner is regarded as an unfair practice and a violation of the trade secret. However the conditions for protection guaranteed by a trade secret may vary from country to country. Depending on the national legal regime, trade secrets are subject to the protection provided for in unfair competition laws or other specific provisions (like the provisions of labour law, criminal law, civil law, invention law, or IP law), as well as to rules developed in case law relating to secret information protection.
As there is no formal registration process for trade secrets, they are often referred to as “unregistered rights”. Theoretically, trade secrets will last forever as long as the information does not enter the public domain.
In Southeast Asia, as is the case in most parts of the world, the protection of trade secrets can only be achieved when the following criteria are met:
- The information must not be available to the public;
- The information must offer real or potential advantages to the business in question;
- You must be able to prove that you took measures to protect the confidentiality of the information (confidentiality clauses, password protection, restricted access to important information, etc)
Brief guide on Trade Secrets protection in ASEAN countries:
In Brunei, trade secrets are not regulated by any specific legislation. Provision does however exist in common law as the protection of trade secrets are usually provided for in a contract; for instance a contract of employment will provide that an employee leaving employment is contractually bound to protect the trade secrets of the employer for a specific number of years.
A specific law on trade secrets has yet to be adopted in Cambodia. However, a draft law is currently being negotiated and thus trade secrets may be protected under other laws. For example, to maintain information in employment or other contractual relationships, a non-disclosure agreement may be used and enforced pursuant to the Contract Law of 1998.
It is necessary to prove that the trade secret has been unlawfully obtained by the suspected party in Indonesia. Proving this may be difficult as the litigation procedure is not equipped with a discovery procedure to uncover relevant evidence of the suspected party. It may only be helpful if you can prove that the local company had some form of relationship previously with you (the victim company) OR was previously given access to the trade secret. Companies should proceed with caution when engaging investigators because the law accords certain privacy rights, and the infringers themselves could argue in a criminal case that their own privacy rights were infringed upon.
In Laos, IP Law was only enacted in year 2011. Article 20 of the IP Law sets out the conditions for information to be considered a trade secret: the information must be useful for operating a business or service, it must be information not widely known to the general public, and it must be information not yet accessible by persons who are normally connected with it. Information not eligible for protection as trade secrets includes personal secrets, secrets of the state and state administration, and other non-business related secret information.
Trade secrets are recognised in Malaysia and qualify for IP protection as long as the criteria sets out above are satisfied. It is advisable to incorporate confidentiality terms in employment contracts to protect your trade secrets. This ‘confidential information’ should be defined in sufficiently broad terms to include information created by employees during the term of their employment. Despite being classified as unregistered rights, trade secrets in Malaysia are recognised and can be enforced, with the provision of sufficient evidence that the trade secrets are not known to the general public, the abuse of which is to the detriment of your business, and you have adopted sufficient safeguards to ensure their confidentiality.
There is no law on trade secrets in Myanmar. Protection for confidential information arises solely from the law of contract, so there is no means of protection where no contractual relationship exists. The secret know-how will only be protected on the basis of a mutual legal relation created by agreements (non-disclosure or confidentiality agreements/clauses) signed with subcontractors, licensees, etc., obliging them to keep the information confidential, as well as agreements signed with employees under which they have a duty not to disclose the confidential information, both during the term of their employment and after its termination, and also obliging them (contractors, licensees, employees, etc.) not to use it for competition purposes.
While the Filipino IP Code includes ‘protection of undisclosed information’ as one of the intellectual property rights, it does not define it. At present, there is no law that defines trade secrets but the Supreme Court (in the case of Air Philippines Corp. v. Pennswell Inc. G.R. 172835, 13 December 2007) adopted the definition of the term from Black’s Law Dictionary: “A trade secret is defined as a plan or process, tool, mechanism, or compound known only to its owner and those of his [her] employees to whom it is necessary to confide it.” There are laws that prohibit revelation of trade secrets (such as the Article 40 (e) of RA 7394 of the Consumer Protection act and Article 292 of the Revised Penal Code), however, these laws are rarely cited for enforcement. SMEs should take internal steps to protect any trade secrets by inserting confidentiality clauses into employee contracts, internally restricting access to sensitive information, and ensuring that confidential information is only revealed on a need-to-know basis. Given that laws on trade secrets are rarely brought to court in the Philippines, in the event that a criminal case is filed for violation of these laws, the Regional Trial Courts (RTC) the highest trial courts in the Philippines are unlikely to be familiar with this issue. In practice, parties tend to stipulate contractual obligations on trade secrets and, in the case of violations, resort to civil action for breach of contract and damages.
Trade secrets are protected under Singaporean law. They must however, be confidential and not widely available to the public. You must also be able to clearly demonstrate an obligation of confidence towards third parties, for example, by signing non- disclosure agreements or having a confidentiality clause included within agreements with other parties. Another useful tool to be aware of is the Singapore Misuse of Computer Act. The relatively wide definition of computer misuse makes it an offence if a person gains unauthorised access to the employer’s computers to retrieve or download information. The Computer Misuse Act is relevant to the protection of trade secrets as most confidential information now tends to be stored in company computers. Complaints under the Misuse of Computer Act are often a cheap and effective way of protecting trade secrets since investigation and prosecution are carried out by the police and state prosecutor. The employer’s only outlay might be in engaging a local consultant to undertake computer forensics in order to collect any evidence deemed relevant in order for the police to take the case further.
The protection of trade secrets was incorporated into Thai law in 2002. As trade secrets are classified as ‘unregistered rights’, there is no formal registration system. Trade secrets can be voluntarily recorded with the Thai Department of Intellectual Property (DIP). Only basic information is required for this and efficient recording strategies can be set up without actually disclosing essential contents of the trade secret. Recording with the DIP can be advantageous as it provides clear evidence in any possible legal dispute. Thai law does not yet grant data ‘exclusivity’, which would guarantee additional market protection for originator pharmaceutical companies. This means that authorities in Thailand, such as health authorities or generic drug applicants, are not prohibited from using data to approve generic versions of the original product.
Trade secrets are protected upon creation without any registration, provided that reasonable measures have been taken to ensure secrecy. It is worth noting that, as trade secrets are a relatively new addition to Vietnamese IP law, the authorities have not dealt with many infringement cases relating to trade secrets.