You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

April 18, 2014

Protecting Trade Secrets Essential to Stay Ahead

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Intellectual property rights (IPR) protection is a key part of success in today’s business environment. As manufacturing companies grow, it is inevitable for corporate management—regardless of the type of industry—to shift its focus from tangible products to the intangible assets of intellectual property.

While trademarks, copyrights, and patents are a central focus in discussions of IPR among business owners, there is another important intellectual property right that can improve a company’s competitive advantage and help it differentiate its business and/or products from those of its competitors: the “trade secret.”

Trade secrets are protected in Thailand under the Trade Secret Act (TSA) B.E. 2545 (2002). The principal rule of a trade secret is that it can be protected as long as it is undisclosed.

Section 3 of the TSA states: “Trade secrets mean trade information not yet publicly known or not yet accessible by persons who are normally connected with the information, the commercial values of which derive from its secrecy and that the controller of the trade secrets has taken appropriate measures to maintain the secrecy.”

“Trade information means any medium that conveys the meaning of a statement, facts, or other information irrespective of its method and forms. It shall also include formulas, patterns, compilations or assembled works, programs, methods, techniques, or processes.”

Trade secrets can be categorized into two types:

  • Industrial secrets, which consist of trade information related to technical matters such as a manufacturing process or a chemical formula.
  • Commercial secrets, which consist of trade information related to sales methods, contract forms, customer lists, advertisement techniques, etc.

Unlike patent protection, there is no expiration date for trade secret protection and no registration procedure is required to obtain trade secret protection. Instead, trade secrets shall be protected as long as they are deemed secret. As the length of time for trade secret protection can be short or long, depending on the ability of the company to maintain the secrecy of its valuable information, it is therefore very important for the company to understand how to maintain and manage its information.

In recognition of this need, the Trade Secret Act stipulates that the controller of a trade secret take “appropriate measures” to maintain the secret. “Appropriate measures” can vary, depending on the type of information. It is recommended, however, that the company should, at the very least, implement a “confidentiality policy” among its employees, especially for those whose work relates to technical information, production, research and development, as well as sales and marketing.

A “non-disclosure term” should be standard in the company’s employment agreements. Also, special steps should be taken to ensure that employees have proper authorization to access any of the company’s important information. These steps should include such measures as passwords, fingerprint scans, and iris scans, among any other method for identification.

Under the law, the trade secret owner has the right to disclose, take, or use his trade secret, and/or permit others to use his right along with any necessary condition to maintain its secrecy. Acts amounting to infringement of a trade secret right under the TSA include disclosure, deprivation, or use of a trade secret without the consent of the owner in a manner contrary to honest trade practices. In so doing, the infringer must be aware or has reasonable cause to be aware that such act is contrary to honest trade practices.

Where there is clear evidence that a trade secret infringement has been committed or is imminent, the affected controller is entitled to apply to the Intellectual Property and International Trade Court (IP&IT Court) for the following injunctions:

  • A preliminary injunction ordering the violator to temporarily stop or refrain from infringing the trade secret, whether before or after the filing of a suit with the Court; and
  • A permanent injunction prohibiting the violator from infringing the trade secret. In addition to damages for the actual damage suffered, in trade secret litigation the court may include in the damages for the plaintiff an accounting of profits accrued from or in connection with the infringement by the infringer.

The greatest advantage of trade secret protection is that a company can maintain secrecy and know-how. Also, there is no time limitation for protection as long as the secrets are deemed secret. Therefore, if a company decides to obtain protection for its know-how through the TSA, it must ensure that it can manage and protect its secret through company capital and/or human effort.

As to whether protection is obtained through a patent or trade secret, it is recommended that a company should weigh the value of the know-how against its ability and capital to manage and maintain the secret. If it is valuable, trade secret protection may be worthwhile for the company to maintain long-term protection.

Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

April 25, 2025
Vietnam is on the cusp of a major judicial reform with significant implications for intellectual property (IP) litigators. A draft law, expected to be passed in mid-2025, will restructure the court system into a three-tiered judicial hierarchy while retaining the current two-tiered trial structure. The reforms include the anticipated establishment of a specialized IP court and a reallocation of jurisdiction that may fundamentally change how and where IP disputes are resolved. From 63 to 34: Fewer Provinces, Fewer Courts – But Wider Reach Under the new model, the judiciary will be organized into three levels: (i) the Supreme People’s Court, with three newly established appellate courts in Hanoi, Da Nang, and Ho Chi Minh City, (ii) the 34 provincial-level People’s Courts (following a reduction from 63 provinces to 34 due to administrative consolidation), and (iii) a newly created tier of regional-level courts (tòa án khu vực) that will replace the existing district-level courts. Each regional court will encompass several district-level courts within a province. The number of regional courts in each province will be determined based on the number of districts following a planned reduction. While the number of provincial-level courts will decrease, the newly established regional-level courts will be granted expanded jurisdiction. Notably, these courts will have first-instance jurisdiction over a broad range of civil, commercial, and administrative matters. In criminal cases, they will handle offenses punishable by up to 20 years’ imprisonment, while more serious crimes will remain under the jurisdiction of provincial-level courts. For IP litigators, this likely means that first-instance cases, especially civil infringement disputes, will shift from the provincial level to the lower regional level. These regional courts will become the new battleground for IP enforcement. Same Two-Tier Adjudication, Different Game Board While the judicial structure is evolving, the core adjudicative framework remains unchanged:
Read More
March 13, 2025
Licensing specialists at Tilleke & Gibbins in Bangkok have contributed the Thailand chapter to the newly issued Licensing 2025, a comprehensive guide from Lexology Panoramic to licensing in various jurisdictions around the world. The Thailand chapter covers the following topics: Laws and licensing arrangements: Unfair Contract Terms Act, Trade Competition Act, pre-contractual disclosure, registration of international licensing, implied obligations, Civil and Commercial Code, Trademark Act, Patent Act, Trade Secrets Act Intellectual property issues: Paris Convention for the Protection of Industrial Property, contesting the validity of licensor’s IP rights, invalidity and expiry of IP rights, security interests, proceedings against third parties, sublicensing, jointly owned IP, first to file, scope of patent protection, trade secrets, copyright Software licensing: Perpetual licensing, legal requirements, user restrictions Royalties and payments, currency conversion, and taxes: Relevant legislation, restrictions, taxation of foreign licensors Competition law issues: Restrictions on trade, legal restrictions, and IP-related court rulings Indemnification, disclaimers, and damages: Prevalence and enforceability of indemnity provisions and contractual waivers of damages Termination: Right to terminate, impact of termination Bankruptcy: Impact of licensee or licensor bankruptcy Dispute resolution: Governing law, arbitration, enforceability, injunctive relief, contractual waivers The Thailand chapter was authored by Alan Adcock, partner, and Kasama Sriwatanakul, counsel, both in the Thailand regulatory affairs team. The full Thailand chapter is available below as a PDF. Tilleke & Gibbins also contributed the Vietnam chapter to Licensing 2025. Readers can gain 30 days of complementary access to the full Licensing 2025 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More
March 12, 2025
In November 2024, Thai Prime Minister Paethongtarn Shinawatra unveiled ambitious plans to enhance tax incentives for foreign film productions during a networking reception in Los Angeles, coinciding with her visit to the APEC Economic Leaders’ Meeting in Lima, Peru. This event, attended by Motion Picture Association executives and leaders from top US film companies, marked a significant commitment to boosting foreign investment in Thailand’s film industry. Thailand’s Department of Tourism (DOT) prioritized the initiative by updating the Announcement on Guidelines, Procedures, and Conditions for Applying for Benefits Under the Incentive Measures for Foreign Film Production in Thailand in December 2024 to further position Thailand as a destination for large-scale international film and television productions. Key Amendments to Film Incentives under the 2024 Announcement The 2024 announcement introduced major changes, including (1) removal of the rebate cap, previously set at THB 150 million (approx. USD 4.5 million) per project, enabling rebates based on total qualified spending, and (2) an increase in cash rebate rates. The maximum allowable cash rebate rate was increased to 30 percent from the previous cap of 20 percent. The base rate of 15 percent remains unchanged. The primary incentive available under the 2024 announcement is a 15 percent cash rebate on qualified spending in Thailand of at least THB 50 million (approx. USD 1.5 million). On top of this primary incentive, additional incentives are available; however, the total possible cash rebate is capped at 30 percent, and the additional incentives can only amount to an added 15 percent. Also, the total rebate (including both primary and additional incentives) for films with a budget of less than THB 100 million (approx. USD 3 million) is capped at 25%. To obtain a higher rebate rate, productions may apply for the following additional incentives: Compliance Requirements Foreign production companies
Read More