Singapore Borrows From Silicon Valley to Protect Ideas

Shenzhen may be Asia’s Silicon Valley, but when it comes to protecting company secrets it’s Singapore that is taking a page from the U.S. technology hub’s playbook. Domestic and international companies are increasingly requiring visitors to sign nondisclosure agreements — an entrenched practice in the U.S. — before they step past the reception desk in Singapore.

The city-state’s embrace of NDAs is at odds with much of the rest of the region, where homegrown companies seldom require visitor pledges not to disclose anything they see. The diverging approaches reflect sharply contrasting attitudes to intellectual property in two of Asia’s biggest tech centers: zealously compliant Singapore and China’s traditionally lackadaisical views of intellectual property, with mainland companies seldom fretting about leakage of sensitive information.

Paul Haswell, tech partner at law firm Pinsent Masons in Hong Kong and a proponent of NDAs, attributes China’s lack of affinity for the procedure to the country’s views on the value of intellectual property and of NDAs in general. That, he says, “will hopefully change as Chinese IP becomes more valuable.”

There’s a stronger compliance culture in Singapore than other countries.

Mark Parsons, partner at Hogan Lovells

Other China-based lawyers have a similarly optimistic view. As Chinese companies transition from simply copying from the West to trying out new products and business models, the desire — and need — to protect IP will become more pressing. Multinationals, by contrast, appear especially vigilant in the country. One China analyst says he has only ever been asked to sign NDAs in China at foreign companies, while one lawyer recalls being obliged to sit through a training video at a China-based European multinational before he could begin meetings.

The use of NDAs in Singapore extends from multinationals including Google, LinkedIn and Facebook, which deploy the practice globally, to local companies such as ride-hailing app Grab and Alibaba-owned e-commerce group Lazada.

Lazada said it introduced NDAs “because our open-office layout places a high risk that our proprietary information may be exposed to visitors.” Sea, the gaming and e-commerce platform backed by Tencent, is considering introducing them, according to one person familiar with the company.

“There’s a stronger compliance culture in Singapore than other countries,” says Mark Parsons, a partner at law firm Hogan Lovells. He points out that it’s common to hand over ID cards when entering office buildings in Singapore. “Organizations want to have stringent policies in place in terms of business partners trusting them with information.”

Others attributed the practice to Singapore’s growing tech and startup sector, an area the government is aggressively promoting.

“If you are a tech company, especially a startup, you don’t want your ideas to walk out the door,” says Ken Chia, principal at Baker McKenzie Wong & Leow in Singapore. “It’s jeopardizing your intellectual property.”

For bigger companies, such as Uber, which recently sold its Southeast Asia operations to Grab, “it’s necessary because of how fast the businesses are moving and the sort of stuff they are discussing,” Chia says. There’s another factor too, he suggests: “A lot of people do come from Silicon Valley, where this is more standard.”