Indonesia – Trade Secrets.

10 February, 2016

 

 

What are trade secrets?

 

In simple terms, a ‘trade secret’ is any information in the field of technology and/or business which is maintained confidential by its owner and has economic value when used in business activities. Such information can include methods of productions, methods of processing, sales methodology, customer databases, product recipes, or any other information with potential economic value.

 

Trade secrets in Indonesia

 

Trade secrets have enjoyed express protection in Indonesia since December 2000 provided that they fulfil three specific criteria, as follows:

 

• The information is confidential
• It has real or potential economic value
• Necessary measures have been taken to protect its secrecy.

 

The third criteria is met by companies’ introduction and adherence to standard procedures for data protection. These procedures must cover physical, technical, and contractual measures in order to be effective;

 

Physical measures: These usually consist of exercise of control over physical documents, for example marking sensitive material as ‘confidential’ or ‘trade secret’, controlling who has access to these documents, and locking material away when not in use.

 

Technical measures: These include the setting up of controls over access to electronic information, including password protection of servers or folders in which sensitive material is kept, installation of adequate firewall software etc.

 

Contractual measures: These measures relate directly to staff and partner concerns. All employment contracts should include adequate provisions for the non-disclosure of any sensitive material that the employee may be given access to, especially those who will be working directly with this data. Furthermore, any partners, e.g. local manufacturers etc should be asked to sign Non-Disclosure Agreements (NDAs) prior to any exchange of information.

 

As long as information is adequately protected there is no time limit to trade secret protection, however the legal protection lapses as soon as the information becomes widely known or public knowledge. As such, enforcement proceedings against suspected parties promptly before any material is released. In Indonesia it is necessary to prove that the secret has been taken by the suspected party however and this can be difficult as the litigation procedure is not equipped with sufficient discovery mechanisms to uncover the relevant evidence.

 

Companies can assist the courts by having their own security monitoring in place, including CCTV recording and recorded entry/exit data of rooms where physical documents are held, as well as electronic monitoring of file access and copying etc.

 

Companies can also engage local investigators, however this approach should me made with caution as Indonesian law accords individuals’ strict privacy rights and infringers could complain that their own rights have been infringed, potentially weakening any case against them.