trade secrets

Malaysia Trade Secret Law

Malaysia does not have a trade secret law but the courts will uphold the tenets of the common law of tort of breach of confidential information and/or contract- in other words you must have a black and white contract on how you divulge your secrets to a third party. Your contract must state very clearly what constitute your trade secret : it might be in the tangible form or intangible forms. In order that you may divulge your trade secrets, you must put in writing of what are the secrets. If it is of a physical entity, then it would be best that you put it in a technical term and if it is of an intangible form like your trade partners, then you would be best to also state it out very clearly : in black and white. But there is also the question of whether you can part own your trade secret with the person that is to share your trade secrets. Yes, indeed there are instruments that allow you to do that : you may tokenize it in the form of NFT (non-fungible token).


America : 2016 USA Defend Trade Secret Act

Europe : 2016 Trade Secret Directive

Japan : 2018 Unfair Competition Prevention Act

China : 2017, 2019 Anti Unfair Competition Law


What constitute a Trade Secret

A type of intellectual property that broadly includes all forms and types of information (for example, formulas, patterns, plans, compilations, programs, devices, designs, methods, techniques, or processes), that:

* Provides an economic or competitive advantage to its owner because the information is not generally known to or available through proper means by another person who can obtain economic value from its disclosure or use.

* Is subject to reasonable efforts by its owner to maintain its secrecy.


Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed. In general, to qualify as a trade secret, the information must be:

* it is commercially valuable because it is secret

* be known only to a limited group of persons

* be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.


The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.

Trade secrets are protected by:

* Federal law under the Economic Espionage Act, as amended by the Defend Trade Secrets Act of 2016.

* State law. The specific state law requirements for, and scope of, protection vary from state to state, although most states have adopted a version of the Uniform Trade Secrets Act.


Advantages of Trade Secrets

* No need to register with the authorities (patent registrar)

* No need to get approval from the authorities (patent office) - which is a great plus!

* No time limit to protection

* Wider scope of things considered as a trade secret


Stealing of trade secrets is treated as a crime by most jurisdictions. It is even more serious that stealing of patents as if you are convicted you can go to jail! Trade secrets are treated as intellectual property but unlike patents, trade mark and copyrights; you do not need to register it with the authorities. All you need to do is to take preventive measures to keep it secret but of course you can share the secret with a third party with a proviso that the third party must also keep it a secret. In the present environment, if instead of a black and white agreement, you may also tie up with a digital smart contract registered in a block chain. This make it very convenient for you to engage in a sharing of trade secrets and it has a huge impact on how we go to trade with the rest of the world. But before you go to engage someone to share your trade secrets, it would be necessary to put that trade secret in a document : make it having multiple parts so as to have a better control. For technical materials, you might want to engage a professional to write out the draft of specifications : make it multiple drafters so that each will not have the whole picture. If you are in a dilemma as to how to manage your intellectual property, then give us a thinker to help you out. Remember, with the ability to tokenize your trade secrets, you may indeed solve your liquidity problem. New tools for old problems!