Protection of MSME Trade Secrets Through the Application of Non-Disclosure Agreements in Indonesia

Illustration by AI

FORMOSA NEWS

The application of Non-Disclosure Agreements (NDAs) plays a crucial role in providing legal certainty and preventive protection for the trade secrets of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. This in-depth study was conducted by Dwinda Parianti Hapsari from Mataram University and published in August 2026. This research holds high urgency given that intangible assets such as product formulas, customer databases, and production methods constitute key competitive advantages of MSMEs that are vulnerable to leaks amid global competition.

In practice, the MSME sector in Indonesia often faces classic challenges such as low legal literacy, an informal business culture based on verbal trust, and power imbalances when dealing with larger business partners. On the other hand, Law Number 30 of 2000 on Trade Secrets recognizes confidential information with economic value, but the regulation does not explicitly list NDAs as named contracts. Consequently, the legal force of NDAs relies on general contract law provisions in the Indonesian Civil Code (KUHPerdata).

To examine this issue, the research employed a normative legal approach with statutory and conceptual approaches, analyzing primary legal materials such as the Civil Code, the Trade Secrets Law, and the MSME Law through qualitative library research.

Analysis of the data reveals several key findings regarding the effectiveness and legal standing of NDAs for MSMEs:

• The legal validity of NDAs rests on Articles 1320 and 1338 of the Civil Code as unnamed agreements (onbenoemde overeenkomst) that bind parties like law.
• Law Number 30 of 2000 provides substantive standards consisting of elements of confidentiality, economic value, and reasonable protection measures that shape NDA clauses.
• An ideal confidentiality agreement for MSMEs comprises eleven core clauses adapted to five types of business relationships: employment, partnership, pre-investment, production, and suppliers/distributors.
• Major obstacles to implementing NDAs in the field include high legal drafting costs, difficulty proving losses from information leaks, and minimal technological security access on personal devices.

The implications of these findings emphasize the importance of government agencies, universities, and legal aid institutions in providing easily accessible standard draft confidentiality agreements and legal literacy training for business actors. As emphasized by Dwinda Parianti Hapsari from Mataram University, the protection of MSME trade secrets depends not only on existing laws but also on the practical ability of business actors to design and enforce dispute prevention instruments proportionally.

Author Profile: Dwinda Parianti Hapsari is an academic and researcher from the Faculty of Law, University of Mataram, Indonesia, specializing in civil law and intellectual property protection.

Research Source: The Application of Non-Disclosure Agreements In Protecting The Trade Secrets of Micro, Small, and Medium Enterprises In Indonesia, International Journal of Education and Life Sciences (IJELS), Vol. 4, No. 8, August 2026, pages 1313-1324, DOI: https://doi.org/10.59890/ijels.v4i8.64.