Trade Secrets In Thailand: New Developments On The Horizon

Article by Mrs Parichart Jaravigit and Mr Edward J. Kelly IV

Thailand, as a member of the World Trade Organization (WTO), is obligated to enact laws to protect "undisclosed information," or trade secrets, in order to be in compliance with Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement). Article 39 states that the member states must ensure effective protection of trade secrets against unfair competition, as provided in Article 10 bis of the Paris Convention (1967). Furthermore, the Trade Secret Act (TSA) has been drafted in order to support the operation of free trade and to protect against unfair business practices.

The draft TSA has been proposed by Thailand's Ministry of Commerce and is now being considered by the members of the House of Representatives and the Senate. The consideration is presently very fluid, with the Senate having made some amendments to the draft, and the House of Representatives having disagreed with the Senate amendments. Therefore, at this time, the draft Trade Secret Act is being considered by a cooperative committee of Parliament to develop a compromise draft of the act that will be submitted to the Parliament for approval in the next 6 to 10 months.

Current Protection For Trade Secrets In Thailand

Currently the Thai Penal Code provides protection for trade secrets, under Title XI "Offences Against Liberty and Reputation" Chapter 2, "Offences of Disclosure of Private Secrets" Sections 323 and 324. Section 323 provides protection for all secrets, regardless of their nature. However, the provisions limit liability only to competent officials, medical practitioners, pharmacists, druggists, midwives, nursing attendants, priests, advocates, lawyers, or auditors, or assistants of such professions, who acquire the secret by reason of their professional function.

On the other hand, Section 324 of the Penal Code provides punishment for those persons whom, by reason of their function, profession, or calling of trust, disclose a secret. However, in this section, protection is expressly provided only for secrets concerning industry, discovery, or scientific invention.

Clearly, the Penal Code limits the scope of both the type of offender and the type of the secret that is encompassed. Moreover, the penalty stipulated under these sections is quite minimal by comparison with penalties proposed in the draft TSA. Offenders under both Sections 323 and 324 of the Penal Code will only be subject to imprisonment not exceeding six months or a fine not exceeding one thousand baht, or both.

The new draft TSA provides far boarder protection and more severe penalties for trade secret infringement than the current Penal Code provides, as outlined more fully below. The expansion of such protection should be viewed as a benefit for a trade secret owner in seeking remedial action for unauthorized disclosure of secrets.

Current Draft Trade Secrets Act

The present draft TSA contains provisions to protect against unauthorized disclosure of trade secrets, including a framework that enables the Court to issue injunctive relief against trade secrets disclosure. In addition, the Act provides for compensation for the victims of such infringement.

Definition

A trade secret, as protected under the TSA, consists of the following:

Trade information that is not generally known or readily accessible to groups of persons within the circles that normally deal with information of the said kind;

TSA defines "trade information" as material that conveys terms, matters, facts or other things, communicated in whatever way and arranged in whatever form, including formulas, forms, collected or assembled works, programs, methods, techniques or processes.

Trade Secrets can be categorized into two types, as follows:

1.1 Industrial Secrets, which consist of trade information that is related to technical matters, such as a manufacturing process or chemical formula.

1.2 Commercial Secrets, which consist of trade information that is related to sales methods, contract forms, customer lists...