1) What counts as a “trade secret” in Philippine practice

The Philippines does not have a single, standalone “Trade Secrets Act.” Protection is instead built from contract law, tort principles, unfair competition concepts, property rights, labor rules, and procedural remedies. In that framework, a trade secret is commonly understood (and treated by courts and practitioners) as information that:

Derives actual or potential economic value from not being generally known or readily ascertainable by competitors or the public; and
Is subject to reasonable measures to keep it confidential.

Typical trade secrets in the Philippine setting include:

Technical / product: formulas, recipes, chemical compositions, source code, architecture, R&D notes, prototypes, manufacturing methods, QA standards.
Business / commercial: pricing models, bid strategies, cost structures, supplier terms, customer lists with purchasing history, marketing roadmaps, expansion plans, internal dashboards and KPIs.
Operational: logistics routes, fraud rules, credit scoring logic, collections playbooks, internal controls, incident response runbooks.
Data compilations: curated datasets, labeled training data, lead databases, segmentation models—especially when assembled through time, expense, and know-how.

What is not a trade secret (common friction points)

General skills and experience an employee carries (e.g., learned techniques, industry know-how not tied to specific confidential materials).
Publicly available or easily reverse-engineered information.
Information disclosed broadly without controls (e.g., shared to outsiders without confidentiality, posted to public folders, left unprotected).
Material that is “confidential in name only” but not treated as such in practice.

Practical takeaway: In Philippine disputes, the winning story usually includes both (a) the value of the information and (b) the company’s consistent secrecy measures.

2) Legal foundations in the Philippines (the “patchwork” that works)

Even without a single statute devoted to trade secrets, Philippine law provides multiple, overlapping hooks:

A. Contract law (Civil Code): NDAs and confidentiality clauses

Parties are generally free to stipulate confidentiality obligations, provided these are not contrary to law, morals, good customs, public order, or public policy.
Breach of contract becomes a primary cause of action: if there is a signed NDA or employment clause, it is typically the cleanest route to liability.

B. Obligations and “human relations” provisions (Civil Code)

Philippine civil law recognizes liability for acts done:

contrary to morals, good customs, or public policy, or
in bad faith causing damage to another (often invoked alongside contract claims).

These provisions can support claims where an NDA is weak, missing, or where third parties induced or benefited from the breach.

C. Unfair competition / IP-adjacent concepts

While Philippine IP law is not a direct trade secret statute, doctrines against unfair competition and misappropriation through dishonest means can be relevant—especially when a competitor uses improperly obtained confidential information to divert customers or replicate offerings.

D. Labor and employment policy

Employment clauses are scrutinized against:

the employee’s right to earn a living, and
fairness / reasonableness standards.

Confidentiality obligations are generally more enforceable than broad restraints on employment (like sweeping non-compete clauses).

E. Other potentially relevant laws (fact-dependent)

Depending on conduct, additional liabilities may arise—e.g., misuse of computer systems, unauthorized access, data privacy violations, fraud, theft, or breach of trust. These are highly dependent on the specific acts (how information was taken, copied, transmitted, or used).

3) NDAs in the Philippines: core drafting that actually holds up

An NDA can be stand-alone (vendor/partner), embedded in a Master Services Agreement, or mirrored in employment documents. The goal is enforceability and speed when you need urgent injunctive relief.

A. Define “Confidential Information” with precision

Strong NDAs usually:

Cover information in any form (written, oral, electronic, visual, prototypes).
Include derivatives (notes, analyses, summaries, outputs).
Identify common categories that matter to the business.
Avoid relying solely on “marked confidential” (because many secrets are never marked).

Avoid: A definition so broad it looks like a restraint of trade (“everything we ever say is confidential forever”) without carveouts.

B. Use clear carveouts (these help enforceability)

Common exceptions:

Information already publicly known without breach;
Independently developed without use of confidential info;
Lawfully obtained from a third party without duty of confidence;
Disclosures required by law or court order (with notice and cooperation provisions).

C. Specify purpose and permitted use

A common failure point is an NDA that prohibits disclosure but is vague on use. A good NDA prohibits:

Use beyond the stated purpose, and
Use for competitive benefit.

D. Duration: distinguish between “term of agreement” and “duration of duty”

Philippine practice often sets:

A fixed NDA term (e.g., 1–3 years), but
For trade secrets, confidentiality can be framed to last as long as the information remains confidential.

That said, “forever” language should be justified and tied to genuine trade secrets, not ordinary business information.

E. Ownership and return/destruction

Include:

Confirmation that no license is granted,
Return or destruction of materials upon request or termination,
Control over backups and cloud copies (including personal devices),
Certification of compliance.

F. Injunctive relief clause (helpful, not magical)

NDAs often state that breach causes irreparable harm and the disclosing party may seek injunction. Courts still require legal standards, but the clause supports urgency and intention.

G. Liquidated damages: useful but risky if punitive

Liquidated damages can be enforceable if a reasonable pre-estimate of harm at signing and not a penalty. Overly punitive amounts can be reduced or struck.

H. Governing law and venue

For PH parties and PH disputes, specify:

Philippine law, and
Appropriate venue (courts where plaintiff resides or where defendant resides, subject to rules; contractual venue clauses are common but must not defeat mandatory rules).

I. Attorney’s fees and costs

Attorney’s fees provisions can deter breach, but enforcement still depends on proof and judicial discretion.

4) Employment confidentiality: clauses that matter most

Trade secret risk often peaks at:

onboarding (access granted),
active employment (copying, syncing),
resignation (downloads, forwarding),
post-employment (use at competitor).

A robust PH employment package is usually a bundle, not a single clause.

A. Confidentiality and non-disclosure (baseline)

Key elements:

Duty to keep confidential during and after employment,
Prohibit disclosure to anyone not authorized, including family/friends and future employers,
Prohibit uploading to personal email, messaging apps, or personal drives,
Require prompt notice if the employee suspects leakage.

B. “Work product” and IP assignment

Separate but related:

Assign to the employer intellectual property created within scope of employment or using company resources (subject to legal limits and fair treatment).
Require cooperation in executing documents (patents, copyrights, etc.).

Even when the idea isn’t patented, the documentation, code, and designs often are protectable, and their confidentiality can be critical.

C. Return of property + clean exit certification

Best practice includes:

Mandatory return of devices, keys, files, printouts,
Disabling access promptly,
Exit interview checklist,
Signed certification: no retention, no copies, no forwarding.

D. Device, email, and monitoring policies (coordinate with privacy rules)

If you want evidence later, your policies should be consistent:

Company-owned devices and accounts are for business use;
Logs may be monitored for security and compliance;
Access to private communications should be limited and compliant with privacy principles.

Overreach can backfire; evidence obtained through questionable methods can invite counterclaims or undermine credibility.

E. Non-compete clauses (use sparingly and draft narrowly)

In the Philippines, non-competes are not automatically invalid, but they are commonly challenged if they are unreasonable.

Courts tend to look at:

Legitimate business interest (protecting trade secrets, key customer relationships),
Reasonableness of duration (months to a couple of years is more defensible than very long periods),
Geographic scope (meaningful for the business, not “the whole world” unless truly justified),
Scope of restricted work (narrowly tied to the employee’s role and the competitive risk),
Employee’s position (senior roles with access to secrets justify more protection than junior roles with minimal access),
Public policy / right to livelihood.

Stronger approach: Instead of a broad non-compete, use:

confidentiality,
non-solicitation,
non-dealing with certain accounts,
garden leave (if workable),
and tight access controls.

F. Non-solicitation (customers, suppliers, employees)

These are often more enforceable than non-competes when drafted clearly:

Define “solicit” and covered relationships,
Limit the period and scope,
Tie coverage to accounts the employee handled or learned about.

G. Confidentiality training + access controls (your “reasonableness” proof)

When a case arises, a court will ask (directly or indirectly): Did you actually treat it like a secret?

Strong measures include:

Role-based access and least privilege,
Segmented folders with restricted rights,
DLP controls and download limits,
Marking highly sensitive documents,
Training and acknowledgments,
Incident response playbooks,
Offboarding controls (disable access, recover credentials, confirm returns).

5) Common “deal” scenarios beyond employment

A. Investors / due diligence

Use staged disclosure:

Teaser → NDA → data room access tiers.
Watermarking, view-only permissions, and audit logs.
Limit copying and exporting.

B. Vendors and contractors

Vendor NDAs should include:

Confidentiality + permitted purpose,
Subcontractor flow-down obligations,
Security standards (minimum controls, breach notification timelines),
Return/destruction,
Audit rights (or at least documentation).

C. Joint ventures / collaborations

Key is “background IP” vs “foreground IP”:

Who owns what coming in,
Who owns what is developed,
Who can use what after termination,
What remains confidential.

6) When a trade secret leak happens: immediate steps that strengthen remedies

In Philippine disputes, speed and documentation often determine outcomes.

A. Contain and preserve evidence

Disable access, rotate passwords and tokens.
Preserve logs, emails, file activity, device images (using competent IT forensics).
Avoid “self-help” that may violate privacy or tamper with evidence.

B. Send a demand / cease-and-desist (strategic)

Often includes:

Identify confidential categories (without revealing more),
Demand stop-use, return, destruction, and certification,
Put third parties (new employer/competitor) on notice (carefully worded).

C. Consider urgent court relief (injunction)

Where leakage threatens ongoing harm, plaintiffs often pursue temporary restraining order (TRO) and preliminary injunction to stop further use or disclosure.

7) Remedies in the Philippines: what you can realistically pursue

A. Civil remedies (primary pathway)

1) Injunctions (stop-use / stop-disclosure)

You can ask the court to:

prohibit the defendant from using/disclosing secrets,
require return/destruction,
restrict dealing with certain customers,
compel specific acts to prevent further harm.

To succeed, you generally need to show:

a clear legal right (often via NDA/employment clause),
urgent and irreparable injury,
and that the injunction is necessary to prevent continuing harm.

2) Damages

Potential heads of damages include:

Actual damages: lost profits, lost opportunities, increased costs, price erosion, project delays.
Unjust enrichment / accounting: profits attributable to misuse (fact-intensive).
Moral and exemplary damages: possible depending on circumstances (bad faith, wanton conduct), but not automatic.
Attorney’s fees and costs: if stipulated and justified.

Proof is the battleground: Philippine courts are evidence-driven, so damages claims should be supported by documents, financial records, and credible computation methods.

3) Specific performance and contractual remedies

If the defendant signed obligations (return/destruction, non-solicit), you can seek court enforcement.

B. Labor-related actions (when the actor is an employee)

Employers may impose discipline or termination based on:

willful breach of trust,
serious misconduct,
violation of company policies,
and other just causes—provided due process is followed.

These measures do not replace civil remedies; they can proceed alongside them, but each has different standards and forums.

C. Criminal exposure (situational, not “automatic”)

Certain fact patterns may implicate criminal statutes (e.g., theft of devices, unauthorized access, fraud, falsification, or cyber-related conduct). Whether a trade secret dispute should be pursued criminally requires careful assessment because:

criminal cases have higher proof burdens,
they can escalate conflict and affect settlement dynamics,
and misuse of criminal processes can backfire.

D. Actions against third parties (competitors, new employers)

If a third party knowingly benefits from misappropriated secrets or induces breach, claims may be framed through:

inducing breach of contract,
unfair competition-type theories,
damages based on participation or benefit,
and injunctive relief to stop use.

A critical practical step is notice: once a competitor is credibly notified that information is confidential and likely misappropriated, continued use becomes harder to defend as “innocent.”

8) Evidence and procedure in Philippine litigation: what wins cases

A. Identify the secret with enough specificity

Courts are cautious about vague claims. You typically need to specify:

what the trade secret is (categories and examples),
why it is confidential and valuable,
how it was protected,
how it was taken or used.

B. Show “reasonable measures”

Evidence may include:

signed NDAs, employment contracts,
policies and training,
access logs,
restricted folder permissions,
watermarking, DLP measures,
incident reports and forensic findings.

C. Electronic evidence readiness

Since leaks often occur via email, cloud drives, USB devices, screenshots, and messaging apps, success often hinges on:

chain of custody,
authenticity of logs,
reliable forensic extraction,
metadata (timestamps, file hashes),
consistent internal controls.

D. Avoid overreaching discovery or public filings

Trade secret litigation can unintentionally publicize the secret. Typical safeguards include:

requesting confidentiality/protective orders,
filing sensitive annexes under seal where allowed,
redacting nonessential sensitive details.

9) Designing a “trade secret protection stack” (so NDAs aren’t your only line of defense)

A Philippine trade secret program that holds up in real disputes usually includes:

Classification: define tiers (Public, Internal, Confidential, Highly Confidential/Trade Secret).
Access control: least privilege; segregate critical secrets.
Contract coverage: NDAs + employment clauses + vendor flow-downs.
Operational controls: DLP, logging, watermarking, device management, secure repositories.
Training: onboarding + periodic refreshers; sign acknowledgments.
Offboarding: disable access, recover assets, certify no copies, remind obligations.
Incident response: preserve evidence, legal escalation path, communication discipline.
Documentation: be able to prove the above in court.

10) Drafting pitfalls (the ones that commonly weaken enforcement)

Overbroad non-compete that looks like a punishment rather than protection of secrets.
NDA defines confidential info as “everything” with no carveouts and no purpose limitation.
No evidence of secrecy practices: shared passwords, open folders, no training, no labels.
Failure to segregate trade secrets from ordinary internal information.
Delayed response to leakage (suggesting the company didn’t treat it as urgent/valuable).
Aggressive monitoring that creates privacy or evidence admissibility issues.
Reliance on customer lists alone without proving they were confidential compilations (not publicly known, with value, and protected).

11) A practical clause checklist (NDAs + employment)

NDA essentials

Definition + form coverage + derivatives
Carveouts
Purpose + no competitive use
Non-disclosure + non-use
Need-to-know access
Return/destruction + certifications
Injunctive relief language
Liquidated damages (carefully)
Attorney’s fees
Governing law + venue
Security standards + breach notification (for vendors)

Employment essentials

Confidentiality (during/post)
Trade secret acknowledgment
IP assignment / work product ownership
Non-solicit / non-dealing (narrow)
Non-compete (only if necessary; narrow)
Device and data handling policies
Monitoring policy aligned with privacy principles
Exit obligations + certification

12) Important note on use of this article

This is general legal information in the Philippine context and is not a substitute for advice on specific facts, documents, and evidence.