Guide to protecting trade secrets in Thailand

In the context of competition between investors in the market today, trade secrets have become a trump card to help businesses stand out and win market share, including businesses from Thailand. From unique production formulas, creative ideas to customer data, etc are all intangible assets that need to be strictly protected. However, protecting trade secrets is not easy, especially in an era where information is shared at a breakneck pace and cyberattacks are becoming increasingly sophisticated. To deal with these challenges, businesses in Thailand need to build a comprehensive security system, including both technical and non-technical measures, and raise awareness of information security for all employees. Viet An Law would like to guide customers on how to protect trade secrets in Thailand through the article below.

Legal Basis

• The Trade Secrets Act B.E. 2545 as amended by the Trade Secrets Act (No. 2) B.E. 2558

A Preliminary Guide to Trade Secrets in Thailand

• “Trade Secret” means commercial information that has not been publicly disclosed or not yet accessible to ordinary persons in connection with such information. Its commercial value comes from its confidentiality and the fact that the controller of trade secrets has taken appropriate measures to maintain confidentiality.

In order for an information to be considered a trade secret, it must fully converge the following elements:

• Uniqueness: The information must be unique, not general knowledge or information that is easy to find.
• Confidentiality: The information must be reasonably protected by the owner, not publicly available or easily accessible by outsiders.
• Economic value: Information must provide economic value to the owner, which can help the business increase revenue, reduce costs, or create a competitive advantage.

Guide to Storing Trade Secrets in Thailand

• List of trade secrets:
  • List in detail the information that is considered a trade secret, including: recipes, production processes, customer lists, business plans, etc.
  • A detailed description of the economic value of each type of information.
• Safeguards
  • Confidentiality Agreement: Agreement with employees, suppliers, partners, etc. regarding the confidentiality of information.
  • Access control: Clearly define who is allowed to access information and the level of access for each person.
  • Physical security: Safeguards such as locks, cameras, access control, etc.
  • Digital security: Data encryption, firewalls, strong authentication systems, and more.
  • Training: Information security training program for employees.
• Evidence of the implementation of protective measures:
  • Security logs: Record activities related to information access and editing.
  • Training Records: Demonstrate that employees have received security training.
  • Copies of confidentiality agreements.
  • Security audit report (if any).

Guidance on identification of violations against trade secret confidentiality

Infringement of trade secret rights is the act of disclosed, depriving or using a trade secret without the consent of the owner, in a manner contrary to honest trade practices. When breaching this, the infringer must know or have reasonable grounds to know that the act is contrary to the protection of trade secrets. Acts contrary to bona fide trade practices under paragraph one include breach of contract, breach or incitement of breach of confidentiality, bribery, extortion, fraud, theft, receipt of stolen property, or espionage through electronic or other means.

However, there are also acts that are not considered violations of the confidentiality of trade secrets

• Disclosure or use of trade secrets by a person who has obtained trade secrets through a transaction without knowing or having no reasonable grounds to know that the other party of the transaction has obtained trade secrets through the breach of them.
• Disclosure or use of trade secrets by state agencies responsible for maintaining them in the following cases:
  • When necessary to protect public health or safety; or
  • When necessary for the benefit of other public interests that are not for commercial purposes. In that case, the state agency responsible for maintaining the trade secret or the state agency or other relevant individual with access to the trade secret has taken reasonable steps to protect the trade secret from being used in unfair trade activities.
• Independent discovery, i.e. the discovery of trade secrets belonging to others by the researcher’s own invention or development method through his or her expertise; or
• Reverse engineering, i.e., the discovery of a trade secret belonging to another person by evaluating and analyzing a widely known product with the intention of discovering the method by which it was invented, manufactured, or developed, provided that the product has been obtained in good faith by the person who conducted the evaluation and analysis.