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Trade Secret Protection in Thailand

Below are answers to frequently asked questions relating to protection of trade secrets in Thailand. Ananda Intellectual Property has a very strong expertise in advising clients on how to protect their trade secrets in Thailand as well as in the ASEAN and China (non-disclosure agreements, confidentiality agreements, employment agreements, technology transfer, joint-venture agreements, research and development agreements etc.). In Thailand it is also possible to record a trade secret.

An English translation of the Thai Trade Secret Act is available here.

Why protecting trade secrets?

Trade secrets are increasingly important to a wide range of industries. They are usually used by an enterprise to obtain an advantage over competitors within the same industry or profession.

In some jurisdictions such secrets are referred to as "confidential information", while in others they are a subset or example of confidential information. An example of this is the formula or recipe of a product e.g. Coca Cola, which has been protected for decades and has never been disclosed.

How are trade secrets protected in Thailand?

In Thailand, trade secrets are protected under the Trade Secrets Act (2002), which provides protection against misappropriation of confidential information such as formulas, programs, practices, processes, designs, instruments, patterns, or compilations of information.

Although protection granted to trade secrets in Thailand does not require registration, it is important to note that for a company trade secret to be eligible for legal protection in Thailand several conditions must be met.

What are conditions for trade secrets to be eligible in Thailand?

There are three conditions for a trade secret to be eligible for legal protection in Thailand:

  • the information must not be publicly known or must not be yet accessible by persons who are normally connected with the information;
  • the information must possess a commercial value derived from its secrecy; and
  • the controller of the information must have taken appropriate measures to maintain the secrecy.

As a result, it is imperative that trade secret owners have taken appropriate measures to maintain the secrecy. These appropriate measures include for example non-disclosure and non-use clauses in all agreements governing the use of such trade secrets. Such agreements may take the form of, but are not limited to, confidentiality agreements, non-disclosure agreements, employment agreements, manufacturing agreements, etc. Confidentiality provisions must carefully and precisely describe confidential information. Descriptions that are too vague or too general may not be enforceable.

In addition, physical protection measures should be put in place (restricted areas, closed distribution lists for certain type of information, computer access, safes etc,). In case of violation of confidentiality it will be necessary for the trade secret owner to prove that the information was carefully classified as confidential and maintained as such, and that disclosure was unauthorised or due to misappropriation.

When there is a high risk that confidentiality might be breached or that the confidential information (for example, a formula or process) might be reverse-engineered, trade secret owners will usually consider filing a patent application to protect their exclusivity. However a patent application will require the disclosure of the secret and offers a limited protection of 20 years.

It is therefore prudent for trade secret owners to consider all options on a case-by-case basis before opting for a particular protection strategy.

What are the rights conferred by trade secret protection?

Trade secrets owners are exclusively entitled to disclose, deprive of, or use the trade secrets, or license someone else to disclose, deprive of, or use the trade secrets. Trade secrets owners can also stipulate any terms and conditions for the maintenance of the secrecy.

What are the remedies in case of trade secret infringement?

Disclosure, deprivation, or use of a trade secret without the consent of the owner in a manner contrary to honest trade practices is considered an infringement under the law.

Where there is clear evidence that a trade secret infringement has been committed or is imminent, the affected or imminently to be affected owner of a trade secret can:

  1. petition to the court for an interim injunction; or
  2. file an action in the court for a permanent injunction in order to permanently stop the infringement and claim damages from the wrongdoer.

In addition to civil remedies, criminal penalties are also available under Thailand’s Trade Secret Act with criminal penalties up to one year in prison and/or a fine of up to 200,000 Baht (6,600 USD). In case a confidentiality agreement/confidentiality exists between trade secret owner and the discloser, it is also possible to enforce such agreement.

Examples of trade secret violations in Thailand usually involve disclosure of information by an employee to a competitor or the use of such information by a former employee after leaving the company. It is therefore crucial that employment agreements contain relevant confidentiality provisions tailored to specific job descriptions (in particular in cases where an employee has access to very confidential information).

Quick tips for trade secret protection in Thailand

QUICK TIPS
  • Carefully consider whether patent protection is not preferable to trade secret protection.
  • Always maintain secrecy of a trade secret by means of confidentiality agreements and confidentiality provisions in various types of agreements.
  • Set up a clear policy within the company to avoid disclosure.
  • Mark as confidential all documents, which should not be disclosed outside the company.