Trade secrets represent some of a company’s most valuable assets—comprising non-public business information that provides a competitive edge.
Unlike other intellectual property rights that require public disclosure, trade secrets yield their protection and benefits precisely because they remain confidential. However, when these secrets are leaked, companies risk losing their competitive advantage and suffering significant financial harm.
Trade secret violations can occur for several reasons, including inadequate security measures, employee negligence, or even industrial espionage.
Under Article 13 of Law No. 30/2000 on Trade Secrets, a violation occurs when an individual deliberately disclose a trade secret or breaches any agreement (written or unwritten) to maintain its confidentiality.
Further, Article 14 stipulates that a person is deemed to have violated another’s trade secret if they acquire or control the secret in a manner that contravenes prevailing laws. Notably, the law provides exceptions: a breach is not recognized if the disclosure or use of the trade secret is for purposes related to public safety, health, or security, or if the information is reverse engineered solely for further product development.
Legal Recourse and Court Jurisdiction
Trade secret owners—or their licensees—are entitled to pursue legal action against anyone who intentionally or unlawfully uses or discloses their trade secrets for commercial gain.
Such actions may result in claims for damages and/or injunctions to prevent further breaches. Unlike other intellectual property disputes that are typically handled by the Commercial Court, trade secret lawsuits must be filed in the District Court, as mandated by Article 11(2) of the Trade Secrets Law. Alternatively, parties may choose arbitration or other forms of dispute resolution.
The Trade Secrets Law also imposes criminal penalties on violators.
Article 17 of the law provides that anyone who intentionally and without proper authorization uses another’s trade secret—or commits acts as outlined in Articles 13 and 14—may face imprisonment for up to two years and/or a fine of up to Rp 300,000,000.
Importantly, such offenses are complaint-based, meaning that legal proceedings can only commence following a formal complaint by the aggrieved party. In addition, Article 18 allows judges, upon request, to conduct hearings in closed sessions to protect sensitive information during both criminal and civil proceedings.
Also read: Criteria for Trade Secrets Protected by Law
Protecting Your Business
For business owners, protecting trade secrets is essential to maintaining competitive advantage and ensuring business continuity. It is imperative to adopt both preventive measures (to secure valuable information) and repressive strategies (to address breaches when they occur). Consulting with legal experts is strongly recommended to ensure that appropriate measures are in place and to manage any incidents of trade secret violations effectively.
Baca juga: How to Handle Trade Secret Breaches
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