STUDY ON THE
PROTECTION AND
MANAGEMENT OF
TRADE SECRETSIN SINGAPORE

A. INTRODUCTION
Trade secrets generally refer to information that is secret and has commercial value. Reasonable
steps must be taken by the owner (such as an enterprise or innovator) to keep such information
confidential.1 Examples of trade secrets include methods or techniques of manufacture, commercial
data such as lists of suppliers and clients, recipes, formulas and source codes.
Globally, trade secrets are viewed as increasingly important to economic and enterprise growth.
A 2015 study by the Organisation for Economic Co-operation and Development (“OECD”) foundthat increased trade secret protection translated to better innovation inputs and international
economic flows.2
Among enterprises, there is increasing recognition of the importance of trade secrets for businessgrowth. A 2017 survey by Baker McKenzie3 found that 8 in 10 respondents regarded trade secrets
as an important, if not essential, part of their business. A 2021 study by the Economist Intelligence
Unit4 also found that the top perceived consequences of trade secret misappropriation5 were loss ofbusiness (cited by 52% of the respondents), loss of competitive advantage (51%), and reputational
damage (42%).
In addition, there has been an increased focus on protection of trade secrets in some jurisdictions
with legislation6 specifically targeted at trade secret infringement.7

B. AIMAs part of the national efforts under the Singapore IP Strategy 2030 to maintain Singapore’s worldclass intangible assets (“IA”)/intellectual property (“IP”) regime and support innovative enterprises
in using their IA/IP for growth, a comprehensive study of trade secrets in Singapore was undertaken
by IPOS.
The study aimed to gain a deeper understanding of Singapore’s trade secret regime vis-à-vis othercomparable economies. The study also sought to find out the level of knowledge and ability ofenterprises operating in Singapore to protect and manage their trade secrets, and how they might
be supported in this regard.
1The World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) stipulates that the accepted definition of
trade secrets is information that must meet three criteria – it must be secret, it must be reasonably protected, and it must derive value from its secrecy.
2OECD. 2015. Enquiries into Intellectual Property’s Economic Impact. Chapter 4: An Empirical Assessment of the Economic Implications of Protection for
Trade Secrets.
3Baker McKenzie. 2017. The Board Ultimatum: Protect and Preserve. The Rising Importance of Safeguarding Trade Secrets.
4Economist Intelligence Unit. 2021. Open secrets? Guarding value in the intangible economy.
5For the purposes of this report, the term “trade secret infringement” refers to various acts including misappropriation, unlawful use and unlawful
disclosure. As this study covers these various acts, the term “trade secret infringement” is generally used throughout this report. The term “trade secretmisappropriation” is used only when citing a survey or a study which uses this specific term, for accuracy.
6Examples of such legislative efforts include: (i) the enactment of the Defend Trade Secrets Act by the United States of America in 2016 (ii) amendments to
the Anti-Unfair Competition Law in 2019 by China to shift the burden of proof to the defendants to prove the independent and legitimate origin of the trade
secrets which they are alleged to have infringed and (iii) the introduction of the Directive (EU) 2016/943 on the protection of undisclosed know-how andbusiness information (trade secrets) against their unlawful acquisition, use and disclosure in the European Union (“EU Trade Secrets Directive”).
7For the purposes of this report, the term “trade secret infringement” refers to various acts including misappropriation, unlawful use and unlawful
disclosure. As this study covers these various acts, the term “trade secret infringement” is generally used throughout this report. The term “trade secretmisappropriation” is used only when citing a survey or a study which uses this specific term, for accuracy.

1

C. STUDY APPROACH
A mixed method approach was adopted comprising desktop research, a survey of enterprises
operating in Singapore of various sizes from a wide range of industries, and in-depth engagements(based on the Chatham House Rule) with such enterprises, legal academics, in-house counsels,
legal practitioners, foreign IP Offices and relevant government agencies.
The study focused on two key areas:
Understanding and Supporting Enterprise Needs
Review of the Legal Framework

Understanding and Supporting Enterprise Needs
Beyond desktop research, an enterprise survey was conducted. A total of 51 enterprises responded.
The profile breakdown of these enterprises is as follows:
Majority of the respondents (82%) belonged to Small and Medium-sized Enterprises(“SME”).8
Two-thirds of the respondents (66%) were private businesses, with 16% from business/trade associations and just 4% are related to the government sector. The remaining
respondents were from research institutes and higher education.
There was a good spread of respondents across the various Industry Transformation Map(“ITM”) clusters, with Modern Services (29%) and Manufacturing (21%) being the mostrepresented; and Built Environment and Trade & Connectivity (both 8%) being the least
represented.

ITM
ITM CLUSTERS
CLUSTERS

Modern services

29%

Manufacturing

22%

Essential domestic services

16%

Lifestyle

12%

Built environment

8%

Trade & connectivity

8%

Others6%

N = 51

Individual engagements were also conducted with local and foreign enterprises acrossdifferent profile types, including with SMEs, Multinational Corporations and Large Local
Enterprises from the Manufacturing, Essential Domestic Services, Trade & Connectivity
and Modern Services ITM clusters.
8 Based on Enterprise Singapore’s definition of an SME i.e., 200 or less employees or S$100mil or less in sales revenue.

2

STUDY APPROACH

Review of the Legal Framework
A comparative cross-jurisdictional review was conducted,
Across the common law and civil law spectrum;
Across various regions; andAcross various socio-economic contexts;
including the following jurisdictions:

ASEAN Member
StatesIsraelAustralia

Japan

CanadaChina

Republicof Korea

Denmark

United Kingdom ofGreat Britain andNorthern Ireland

Germany

United Statesof America

The review also considered the EU Trade Secrets Directive.
The comparative review employed an indices approach with the following indices:
Subject Matter Protected i.e. the type of information that will be protected.
Definition of Infringement/Breach i.e. the types of acts that will be consideredinfringement/breach.
Consequences of Infringement/Breach i.e. civil remedies and criminal sanctions.
In-depth engagements were also conducted with IP Offices from various jurisdictions andlegal academics with IP law expertise.
Roundtable sessions were also conducted with legal practitioners with expertise in
IP litigation and in-house counsels from a variety of enterprises (including from the
Manufacturing, Essential Domestic Services, Professional Services and Lifestyle ITM
clusters).

3

D. STUDY FINDINGS
I. Understanding and Supporting Enterprise Needs(i)Enterprises recognise the importance of trade secrets.
Almost all (98%) of the enterprises surveyed recognised the importance of trade secrets totheir business growth.
Neutral
2%
Agree
27%

TRADE SECRETS
ARE IMPORTANT TO
THE GROWTH OF MY
ORGANISATION.
DO YOU AGREE?

Strongly
agree
71%

N = 51
Trade secrets were also most frequently considered to be important (selected by 75% of the
respondents), followed by brand recognition/goodwill (65%), and trade marks and copyright(both 61%).

WHICH OF YOUR ORGANISATION’S IP DOES YOUR ORGANISATIONCONSIDER TO BE THE MOST IMPORTANT TO ITS BUSINESS?
(may select more than one option)
Trade secrets

75%

Brand Recognition/Goodwill

65%

Trade marks

61%

Copyright

61%

Patents

59%

Registered designs
Others24%
2%

N = 51

4

STUDY FINDINGS
Similar observations were made in the aforementioned study by Baker McKenzie, which foundthat 7 in 10 respondents saw trade secret protection as becoming more critical than othertypes of IP protection.
The majority (96%) of the enterprises surveyed also indicated that they had at least one typeof trade secret protection measure in place, with the most common measure being the use ofnon-disclosure agreements (used by 84% of the respondents).

WHAT TYPES OF PRECAUTIONS ARE EMPLOYED BY YOURORGANISATION TO PROTECT TRADE SECRETS?
Non-disclosure agreements

84%

Confidentiality clauses/agreements

76%

Company confidentiality policy and/or guidelines

73%

Technologically restricted access rights

59%

Non-compete clauses

55%

Physical restriction to trade secret access

47%

Training courses for employees

35%

Others4%

No precautions are employed by my organisation

4%

N = 51

A study by the Economist Intelligence Unit9 also found that confidentiality agreements andpolicies (indicated by 68% of the respondents) were the most common measures used toprotect their trade secrets.

(ii) Many enterprises are unsure of how best to protect and manage their trade secrets.
More than half (51%) of the survey respondents indicated that they were not familiar at all with
Singapore’s trade secret regime.
Very familiar
12%

HOW FAMILIAR ARE
YOU WITH SINGAPORE’S
TRADE SECRET REGIME?

Not familiar
at all51%
Somewhatfamiliar37%

N = 51
9 Economist Intelligence Unit. 2021. Open secrets? Guarding value in the intangible economy.

5

STUDY FINDINGS
2 in 5 of the enterprises surveyed did not use any trade secret-related services. Of those who
used such services, the most common type of service was a repository (used by 49% of the
respondents).

WHICH OF THE FOLLOWING SERVICES HAVE YOU USED TO
SAFEGUARD YOUR TRADE SECRETS?
(may select more than one option)

49%

Repository

27%

Time stamping

18%

External IP advisory/management services
Insurance

4%41%

None of the above

N = 51Through the in-depth individual engagements, the following common challenges faced byenterprises were identified: (i) Lack of dedicated IT systems to manage trade secrets; (ii) Lackof training and a strong culture of trade secret management; and (iii) Difficulties by SMEs insafeguarding their trade secrets via contracts due to their small size and lack of bargaining
power.
More than half (55%) of the enterprises surveyed did not transact in trade secrets, with mostof them citing a lack of knowledge as a reason.

WHY DID YOU NOT TRANSACT IN TRADE SECRETS?
(may select more than one option)
Do not know how to transact in trade secrets

50%

No need to transact in trade secrets

40%

Too costly to transact in trade secrets

7%

Others3%

Do not have any trade secrets0%

N = 306

STUDY FINDINGS(iii) Enterprises need help to strengthen their trade secret protection and management
practices.
More than 80% of the enterprises surveyed indicated that their organisation needed moremeasures or policies in place to protect and manage their trade secrets.
No
18%

DO YOU THINK YOURORGANISATION NEEDS TOHAVE OTHER MEASURES
OR POLICIES IN PLACETO PROTECT ITS
TRADE SECRETS?
Yes
82%

N = 51SMEs lagged behind larger enterprises in terms of awareness and capabilities. Larger
enterprises were more likely to provide training for their staff and know what legal recourse to
take in the event of a trade secret misappropriation.

67%

67%

67%

45%

67%

29%

SME

Non-SME

Employ training for staff intrade secret awarenessand capabilities

SME

Non-SME

Know what legal recourse
to take in the event of trade
secret misappropriation

N = 51

Larger enterprises had a better understanding of trade secrets and how it impacts theirbusiness. MNCs also benefitted from support and guidance on trade secrets and other IP
matters from their international headquarters.

7

STUDY FINDINGS(iv) Most enterprises highlighted trade secret misappropriation as a concern, with 1 in
5 encountering at least one instance of trade secret misappropriation in the past
10 years.
Although 9 in 10 of the enterprises surveyed indicated that the misappropriation of trade
secrets was a concern to their organisation, just 1 in 5 had encountered at least one instanceof trade secret misappropriation in the past 10 years.

63%

57%

27%

22%

18%
8%

Strongly
Agree

Agree

Neutral2%
Disagree0%Strongly
DisagreeI am concerned about
misappropriation of trade
secrets0%0 times

1-5times

6 - 10
times

4%
More
than 10times

I do notknow

Number of times
misappropriation of
trade secrets has beenencounteredN = 51

The incidence rate of trade secret misappropriation closely mirrors that of a separate study
by the European Commission,10 in which 1 in 5 of the respondents had suffered at least one
attempt of trade secret misappropriation in the last 10 years. In the United States of America,
various commentaries from institutes and law firms have indicated that trade secret litigation
continues on a steady upward trajectory since the enactment of the Defend Trade Secrets
Act in 2016.11
Former employees were often identified as the main perpetrators. This was indicated by
55% of the enterprises surveyed who had experienced at least one instance of trade secretmisappropriation in the past 10 years.
Enterprises typically avoid an adversarial approach when addressing alleged trade secretmisappropriation, citing the lack of evidence and difficulty in ascertaining the value of damages
suffered. That said, most noted that the “soft” approach, e.g., negotiation and mediation, wasgenerally effective, especially if the misappropriation was unintentional.

10 European Commission. 2013. Study on Trade Secrets and Confidential Business Information in the Internal Market.
11 Examples include: Lex Machina. 2020. Trade Secret Litigation Report; Stout Risius Ross LLC. 2020. Trends in Trade Secret Litigation Report 2020; ipwatchdog.com. 2020. Trade Secret Litigation Reports: Four Years after the Enactment of the Defend Trade Secrets Act; IAM-media.com. 2021. Damages
track upward in US trade secret litigation.

8

STUDY FINDINGS(v) Enterprises need to maintain their guard against trade secret infringement in lightof innovation trends.
Despite an apparently low reported incidence of trade secret misappropriation, there is
nonetheless a heightened need for enterprises to strengthen protection of their trade secrets
as they navigate the current and emerging trends driving innovation. With rapid digitisation,
increasing use of cloud services for safeguarding and managing confidential information
as well as continued remote working, enterprises are at an elevated risk of an increase incybertheft of trade secrets.
For example, a 2021 report by Verizon found that phishing and ransomware attacks haveincreased by 11% and 6% respectively over the past year.12 A separate study by the European
Centre for International Political Economy estimated that cybertheft has led to a €60
billion loss in economic growth in the European Union and the potential loss of 289,000
jobs.13 A recent report by Gartner further highlighted the need for businesses to establish a“Cybersecurity Mesh” to extend data protection beyond internal IT systems to also include
external networks.14

II. Review of the Legal Framework(vi) The findings from our comparative cross-jurisdictional review showed that Singapore’s legal
regime is relatively robust across the three indices employed in the review (see page 3 at
Section C of this report). This aligns with the findings from the engagements with the various
groups of stakeholders such as legal academics, in-house counsels and legal practitioners.
The commonly expressed views were that Singapore’s current trade secret legal framework
is sufficient with a comprehensive toolbox for the protection of trade secrets15 and that there
is no need to enact a trade secret specific legislation nor introduce new criminal sanctions
for trade secret infringement. Moreover, while the regime for protection of confidential
information is largely premised on principles from case law, case law has been evolving andadapting to changing business practices and technological advancements to ensure that our
regime continues to be robust in the protection of such information.16

Index (i): Subject Matter Protected i.e. the type of information that will be protected.
In terms of subject matter protected, a relatively wide range of information is covered. Under thebreach of confidence regime, if the information has a quality of confidence and was imparted
and/or received under an obligation of confidentiality, the information would be caught by thebreach of confidence regime. This is generally understood to mean that the subject matter
protected goes beyond trade secrets to a wide range of confidential information.

12Verizon. 2021. Data Breach Investigations Report 2021.
13ECIPE. 2018. Stealing thunder, Cloud, IoT and 5G paradigm for protecting European commercial interests. Will Cyber espionage be allowed to hold Europe
Back in the global race for industrial competitiveness?
14Gartner. 2021. Top Strategic Technology Trends for 2021.
15This toolbox includes the common law Breach of Confidence regime, Employment Law, Contract Law, Copyright Act, Computer Misuse Act and Penal
Code.
16See analysis on Index (ii) on developments in case law in ascertaining the types of acts that constitute a breach of confidence.

9

STUDY FINDINGS
Index (ii): Definition of Infringement/Breach i.e. the types of acts that will beconsidered infringement/breach.
In terms of defining what constitutes an infringement or breach, a relatively wide scope ofacts is covered including acquisition, use and disclosure. The Computer Misuse Act also deals
with the issue of cybertheft as it imposes criminal sanctions against unauthorised access toor modification of computer material.17
With regard to the breach of confidence regime, infringement/breach may be made out evenin circumstances where defendants do not use or disclose the confidential information but
have wrongfully accessed or acquired the same.18

Index (iii): Consequences of Infringement/Breach i.e. civil remedies and criminal
sanctions.
In terms of this index, there is recourse under the breach of confidence regime, employment
law, contract law as well as the relevant statutes which impose criminal sanctions for infringing
acts. The view generally expressed at the roundtable with legal practitioners was that thevarious regimes provide ample avenues for the protection of trade secrets in terms of both
criminal and civil liability.

(vii) In addition to the above, other views from the engagement sessions with the various groupsof stakeholders from the legal field included:
Concerns about the loss of flexibility resulting from codification.
Feedback on the need to balance between providing strong protection for existing trade
secret holders, and the inadvertent effect an overly strong regime could have on chilling
local innovation, for example by creating barriers to entry.
Shared sentiment on the need to improve awareness and training of both management
and employees, in terms of trade secret protection.
This sentiment is corroborated by the enterprise survey results and in-depth enterprise
engagements, which highlighted that a fundamental concern for enterprises is their lackof awareness of the existing legal framework and the corresponding measures or policies
to put in place to protect and manage their trade secrets (see pages 5 to 7 at Section D(ii)and (iii) of this report).

The importance of maintaining confidentiality in legal proceedings and the need for clearer
rules and processes to give certainty and confidence in instituting legal proceedings in
Singapore.

17See Part II Offences sections of the Computer Misuse Act.
18See the Court of Appeal case of I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] SGCA 32 [43] – [45], [61] – [62],which modified the approach towards breach of confidence claims. The decision has been generally regarded by legal practitioners in
Singapore as addressing evidential difficulties faced by owners of confidential information in bringing a claim for breach, and also taking
into account modern technology.

10

E. SUMMARY AND
RECOMMENDATIONSThe Singapore IP Strategy 2030 underscores IPOS’ commitment to maintaining a world-class IA/
IP regime and supporting innovative businesses in leveraging their IA/IP for growth. This involves
looking into current and emerging business trends.
The mixed methodologies adopted for this study and range of stakeholders consulted provided
IPOS with good insights into the attitudes and approaches of both business and legal stakeholders
to trade secret protection and management. Such insights include the need to strike a balance
between stronger policies that protect existing rights holders and encourage further investments
in research and innovation, against the need to allow information flows and labour mobility toencourage future innovation.
The findings from this study demonstrate that more may be done to support enterprises in theprotection and management of their trade secrets. Addressing these gaps will place the enterprises
and Singapore in better stead to compete in this era of rapid technological advances. On thelegal framework front, there is scope to explore refinements to processes for the preservation ofconfidentiality of trade secrets during legal proceedings. That said, the stakeholders engaged inthis study have also affirmed that there is no substantive need for legislative reform to strengthen
trade secret protection in Singapore.

I. Understanding and Supporting Enterprise Needs
In terms of enterprise support, IPOS will look into these three areas as part of the efforts under theSingapore IP Strategy 2030:
Awareness raising. Curating resources and activities that are designed to generateawareness on the importance of trade secrets, including publishing an enterpriseguide on Singapore’s trade secret regime to provide practical advice for enterprises inprotecting and managing their trade secrets, and case studies of successful protection
and management measures.
Building capability. Building enterprises’ capabilities in trade secret protection andmanagement to enable enterprises to derive better value and business growth fromtrade secrets.
Access to services. Increasing accessibility (or availability) of trade secret-related
services (e.g., time stamping and repository) to support enterprises in trade secretprotection.

II. Review of the Legal Framework
On the legal framework front, IPOS and the Ministry of Law are looking into the feedback on ensuring
the confidentiality of trade secrets during legal proceedings, and will follow up on the matter withthe relevant stakeholders.

11F. ACKNOWLEDGEMENTS
We would like to extend our appreciation to our partners - SGTech, Singapore Business Federation,
Singapore Corporate Counsel Association, Singapore Manufacturing Federation, and IPOS
International, who have assisted us in disseminating the survey to their stakeholders.

We would also like to thank all participants involved, which due to the Chatham House Rule, we areunable to thank by name.
For all who contributed, this report would not have been possible without your valuable input.
Thank you. We look forward to working closely with you to support enterprises in protecting
and managing their trade secrets as they compete globally in this era of rapid technologicaladvancements.

12

The Intellectual Property Office of Singapore(IPOS) is the national authority that registers
and is responsible for the administration of
IP rights in Singapore. IPOS helps businesses
use IP and intangible assets (IA) to grow andis committed to building Singapore into aninternational IA/IP hub. IPOS is a statutory
board under the Ministry of Law.
Published September 2021
© Intellectual Property Office of Singapore
You are free to copy, publish, distribute,and transmit this publication, unmodified
and in its entirety only, for non-commercial
purposes. All other rights reserved.