Product characteristics are crucial. Product characteristics are not limited to the product’s distinctive name, but also include the distinctive taste of food or beverage that can attract consumers. Thus, promoting a product’s characteristic can generate more profit in business.
One or more important information of business actors that is not known by the general public and has a selling value is a wealth that must be protected. Such an important information can be in the form of formulas, recipes, or special methods in the production process.
Regulations on Trade Secret
The right to protect important information is regulated in the Trade-Related Aspects of Intellectual Property Rights (TRIPs), a multilateral agreement on intellectual property issued by the World Trade Organization (WTO).
Article 39. paragraph 2 of the TRIPs stipulates that
Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:
(a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
(b) has commercial value because it is secret; and
(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
In addition to the TRIPs, Indonesia has laws and regulations that protect information, namely Law No. 30/2000 on Trade Secrets.
Article 1 point 1 of Law No. 30 /2000 stipulates as follows:
Trade Secrets are information that is not known by the public in the field of technology and/or business, has economic value because it is useful in business activities, and is kept confidential by the owner of the Trade Secret.
Trade Secrets is subject to protection if the information has economic value and is confidential. Economic value requires that the information has commercial value, and is profitable and useful for business actors in their business.
In order for the information to be confidential, business actors are required to make an agreement with their employees in the production and marketing process. The content of the agreement shall be related to information on the manufacture of goods and/or services, marketing information and other information that affects the income of business actors.
Confidentiality of important information must be a concern for business actors to prevent possible information leak, more specifically the leak of trade secrets. For this reason, upholding confidentiality is an important factor that every business actor must consider.
Since a trade secret does not require any registration, the validity of its protection does not have a specific period of time. Protection will end if the public already knows information related to the trade confidentiality. Therefore, the protection applies as long as the confidential nature of the secret is preserved.
To facilitate and maximize protection, it is better if the agreement between business actors and their employees is written. It is very important to serve as an evidence in a dispute between the business actors and their employees.
Dispute over Trade Secret
If the business actors have made every possible effort to protect their trade secret but it is leaked anyway, the business actors or the owners of the trade secret can settle the trade secret leak case by filing a lawsuit to the district court as regulated by Law No. 30/2000.
A number of international business actors have been keeping their trade secrets. Some of them are Coca Cola, Guinness, KFC and Frisian Flag. Coca Cola has a distinctive soda taste that no one is able to re-create that distinctive taste to date. KFC sells fried chicken that is seasoned with 11 spices, which also has a distinctive taste that no other fried chicken restaurant can re-create its distinctive taste to date.
Distinctive taste is very important in business. It is a characteristic that attracts and draws consumers to buy the product. The absence of competitors producing a product with the same taste is an advantage for the business actor that initially produce the product with distintive taste. .
Business actors are required to maintain the confidentiality of their product information to prevent potential loss. If business actors are negligent in maintaining the confidentiality of their products, it may result in significant financial losses. Therefore, keeping trade secrets is very important.
Law No. 30/2000 regulates the mechanism for resolving trade secret disputes in Articles 11 and 12 as follows:
(1) The holder of the right to trade secret or the licensee may sue anyone who intentionally and without rights commits an act as referred to in Article 4, in the form of;
- claim for compensation; and/or
- cessation of all actions as referred to in Article 4.
(2) The lawsuit as referred to in paragraph 1 is submitted to the District Court
In addition to the settlement of the lawsuit as referred to in Article 11, the parties may resolve the dispute through arbitration or alternative dispute resolution.
Based on the law above, the settlement of trade secret disputes can be done through a district court or through arbitration.
Trade secret disputes have occurred in Indonesia. Some of them are a case involving PT General Food industries Bandung and a case involving CV Bintang Harapan.
In the first case, PT General Food Industries Bandung disputed three of its employees, who brought the company’s trade secrets to their new employers, namely PT Bumi Tangerang Mesindotama. The court ruled that the three former employees were responsible for leaking the trade secrets of PT General Food Industries Bandung and were sanctioned under Law No. 30/2000.
However, the Supreme Court (MA) overturned the verdict and sentenced instead PT General Food to pay compensation to its former employees.
A similar case has occurred between CV Bintang Harapan and its employees. The employees were held responsible for leaking the trade secret of CV Bintang Harapan related to how to mix coffee. The trade secret was leaked to its competitor, CV Tiga Berlian. The Supreme Court found the employees guilty and sentenced them to 1 year in prison.
The two cases above demonstrate that business actors must protect their trade secrets to prevent possible dispute that must be settled in court. Maintaining trade confidentiality is crucial as it relates heavily to profit-making.
Author / Contributor:
 | Rakhmita Desmayanti S.H., M.H Partner Contact: Mail : rakhmita@siplawfirm.id Phone : +62-21 799 7973 / +62-21 799 7975 |