Trade Secrets in Thailand Basic Requirements for Trade Secret Protection Trade Secrets v. Patents Tips for Trade Secret Protection Trade Secret Commercialization How to Protect Trade Secrets in Manufacturing Agreement and Technology Transfer Agreement

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PROTECTION OF TRADE SECRETS IN
MANUFACTURING AND TECHNOLOGY TRANSFER
AGREEMENTS
Kowit Somwaiya, Managing Partner
Paramee Kerativitayanan, Associate
LawPlus Ltd.
Unit 1401, 14th Floor, 990 Abdulrahim Place, Rama IV Road, Bangkok 10500, Thailand
Tel. +66 (0)2 636 0662, Fax +66 (0)2 636 0663
www.lawplusltd.com
25 January 2019

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The information provided in this document is general in nature and may not
apply to any specific situation. Specific advice should be sought before taking
any action based on the information provided. Under no circumstances shall
LawPlus Ltd. or any of its directors, partners and lawyers be liable for any
direct or indirect, incidental or consequential loss or damage that results from
the use of or the reliance upon the information contained in this document
Copyright © 2019 LawPlus Ltd.

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Protection of Trade Secrets in Manufacturing
and Technology Transfer Agreements

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Trade Secrets in Thailand
 Trade Secrets Act B.E. 2545 (A.D. 2002) as amended.
 Three basic requirements for information to be a trade secret eligible for legal
protection:
● the information must be confidential, i.e. not be publicly known or accessible
by persons who are normally connected with the information;
● the information must have a commercial value derived from its secrecy; and
● the controller of the information has taken appropriate measures to
maintain the secrecy.
 No registration is required in order to gain protection.

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Basic Requirements for Trade Secret Protection
Unknown to the
public and not
accessible by
connected
persons
Provides
competitive
advantage and
possess a
commercial
value
Kept confidential:
“appropriate
measures to
maintain the
secrecy.”

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Examples of Trade Secrets (Formulae and Recipes)
 COCA-COLA
 KENTUCKY FRIED CHICKEN
 LISTERINE
 WD-40
 KRISPY KREME DOUGHNUTS
 MCDONALD’S BIG MAC SPECIAL SAUCE
 THE GOOGLE SEARCH ALGORITHM

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Trade Secrets v. Patents
Trade Secrets Patents
Can protect unpatentable information Patentability requirements
Can last forever so long as secrecy is
maintained
Limited term of protection (20 years)
Right to prevent misappropriation
Right to exclude others from using
invention
More difficult to enforce Easier to enforce
Can be reverse engineered Cannot be reverse engineered
No public disclosure Must be fully disclosed
Costs for maintaining secrecy Costs for maintaining registration

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Tips for Trade Secret Protection
 Identify and keep record of your trade secrets.
 Develop a trade secret protection policy, monitor its compliance and prosecute
violators.
 Limit access to trade secrets to the only “need to know” persons.
 Mark documents “confidential”.
 Physically isolate and protect trade secret documents.
 Restrict public access to facilities that house trade secret.
 Maintain and implement computer secrecy policy.
 Include non-disclosure and non-competition clauses in employment agreements.
 Include a non-disclosure clause in agreements with contractors.
Most of trade secret losses are caused by
employees, contractors, trusted insiders!

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Trade Secret Commercialization
 ASSIGNMENT (SALE)
● as a stand alone asset
● as part of business sale
● as part of business transactions
 LICENSE
● license of trade secret alone
● license of trade secret in combination with trademark license or patent license
● license as part of joint venture, manufacturing and distribution agreements
● creation of revenues
● royalty fee at 2% to 3% of net sales
● risk of disclosure resulting in losses of secrecy

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 Sign a non-disclosure agreement before negotiation of the agreement.
 Negotiate detailed clauses on ownership and protection of confidential information
including trade secrets.
 Define what each party must and must not do with the trade secret received.
 Require recipients of trade secret to maintain its secrecy during and after the term of
agreement.
 Impose strict control measures over use and penalties against disclosure or breach of
trade secret by recipients.
 Define scope of rights to access, the right to use and the right to disclose trade secrets.
 Specify that the ownership of any modification of your trade secret belongs to you.
How to Protect Trade Secrets in Manufacturing Agreement
and Technology Transfer Agreement (1)

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 Impose safeguard measures to ensure continuous secrecy of your trade secrets,
preferably equal or exceeding the measures used by recipients.
 Include your rights to audit, inspect, review and verify the conducts of the
manufacturer in relation to your trade secrets.
 Include a clause that automatically terminates the agreement and revokes the trade
secret license upon material breach by recipients.
 Have a clause requiring the manufacturer to keep trade secrets confidential after
termination or expiration of the agreement.
How to Protect Trade Secrets in Manufacturing Agreement
and Technology Transfer Agreement (2)