Important amounts of investment are made in research and development to improve designs, techniques, and processes by SMEs to reduce production costs and increase sales. Trade secrets disputes often arise against employees or former employees and business partners and is a frequent issue affecting SMEs. However, in relation to Thailand, the Central Intellectual Property and International Trade Court (IP&IT Court), has published that only 66 trade secret cases were brought to the IP&IT Court between 2004 and 2014. Of this limited number of cases, the majority had unfortunately no positive outcome for trade secrets’ owners, with the main reason for the court to dismiss a plaintiff’s claim, being the absence of appropriate measures to maintain trade secrets. Key grounds to support a claim of trade secrets theft is indeed represented by the proofs of the existence of a trade secret by demonstrating that the information is protected by measures to maintain its secrecy. Failing to provide certain evidence in this respect, will lead to lose the case.
For example, in Supreme Court Judgment 10217/2553, the Court determined that a general non-disclosure and non-compete clause inserted in an employment agreement was not an appropriate measure to maintain the secrecy of the trade information, and it consequently dismissed the plaintiff’s claim. There are several other Supreme Court decisions in which plaintiffs’ claims have been dismissed for a similar reason. In fact, it was not possible to prove which specific documents containing trade secrets where subject to confidentiality. To win a theft of trade secrets claim, you must show that the information stolen is (1) not publicly known, (2) has commercial value, and (3) that you took measures to keep it secret.
On the other hand, records shows that if a trade secret owner is able to demonstrate that appropriate measures were taken to maintain secrecy over a trade secret, the IP&IT Court is more likely to render a decision in its favor including payment of damages.
- Prevention is the key to protection. More often than not, once a trade secret is disclosed, the damage is already done, and it is often very difficult to recover its value, even if you succeed in litigation.
- Establish an internal management system for trade secrets. Training and clear written guidelines are essential. As your employees may not have the same understanding of proprietary information and intellectual property rights as you might have, it is important to educate them on what can or cannot be disclosed. Adopt appropriate measures to mark and store confidential documents whether such documents are in electronic or paper format.
- Put in place appropriate measures to keep secrecy and confidentiality. Make sure that you will put in place appropriate measures to keep secrecy and confidentiality of your information and that you will be able to unequivocally prove that those measures have been breached by your employees, former employees or business partners.
- Require all employees to sign an employment agreement with strict confidentiality provisions. When a current or former employee steals your trade secrets, having an employment agreement with confidentiality provisions is essential to show that you took measures to keep it secret but you have to determine which type of information are subject to confidentiality.
- Know the local rules. It is very important for businesses to familiarize themselves with the relevant laws in relation to trade secrets in the countries where they are operating or trading in. Know the local rules and consult with local experts would increase the possibility of SMEs to take IP informed decisions in relation to the protection of their trade secrets.