Trade Secrets Or Confidentiality Agreements ' Drafting For Indonesia

• Published date: 19 October 2023
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Trade Secrets, Arbitration & Dispute Resolution
• Law Firm: Rouse
• Author: Mr Kin Wah Chow and Evi Triana

In this article, we will discuss unique factors when drafting trade secrets or confidentiality agreements (NDAs) in the Indonesian context.

The drafting of trade secrets or confidentiality or non-disclosure clauses is usually along the following framework:

a. Defining the confidential information or what is to be included as trade secrets;

b. Defining the duty in the dealing of such information - maintaining confidentiality and the permitted use or disclosure;

c. Defining the exception(s) to the duty such as when there is overriding legal duty to the authorities.

We recommend that drafters of such clauses for use in Indonesia consider providing for liquidated damages as a consequence of the breach. The reason, as would be elaborated below, is that the civil procedure system does not provide any effective means of enforcing injunctions particularly those of the restraining nature.

Enforcement of breach of trade secrets

Although Article 11 of Law No. 30 of 2000 on Trade Secret ("Trade Secret Law") provides for basis for the issuance of a restraining order, there is still no clear understanding of how such an order will be enforced.

In common law countries, the plaintiff will request for a committal order to set in motion contempt proceedings - leading to punishment of either fine or imprisonment. However, there is no such provision under Indonesian Civil procedure rules on the enforcement of a negatively framed order (order not to do something).

Our understanding is also supported by the Supreme Court Regulation 5 of 2012 on Interlocutory Injunction Order (Article 6j) that the consequence for ignoring an injunction is criminal sanction under the Criminal Code Article 216 - this means filing a police complaint to investigate on non-compliance.

It would be a rather circuitous route to have to sue in a civil lawsuit for a restraining order and then file a criminal complaint with the police should it become necessary to enforce the order - this is quite different from Common Law countries in which the same Civil Court which issues the injunction has the power to enforce the order through committal proceedings.

Our...