This article has been written by Biswajit Sarkar Advocates – IP Attorneys.
Protection of trade secrets is the need of the global economy. In the present time, it is important for the business houses to keep their trade and business information confidential to create a competitive advantage. Various information which keeps the business moving and creates profitability, may not be eligible for protection under the conventional concept of IP rights, such as industrial designs, copyright, patents, or trademarks etc. At times, the inventors do not want to get the product/process patented, because the primary requirement of patent protection is the complete disclosure before the public. The concept of the protection trade secrets is evolving globally and various efforts towards their protection are adopted to foster growth and to provide a more congenial business environment, as well as healthy business competition.
A trade secret may subsist in a process of manufacturing , in designing an instrument or a compilation of data or information related to a particular business, which is unknown to the public and more so, it requires to be kept secret and confidential. Such data or information may also involve an economic interest of the business house to gain an economic advantage over competitors. From this perspective, the business strategies, technical know-how and confidential information etc. need to be protected with a high-level secrecy.
To race in the competition, Indian business houses quite often create “something secret” for marketing their products or services. True or not, these ideas have laid down the stones for industry players to capitalise on their trade secrets in India. Presently, most of the businesses are under the constant pressure of various challenges, such as marketing the products at competitive prices and meeting the customers’ expectations at a high level. Thus, it can only be possible when the business has some innovation as well as secrecy. It has been observed in the business that when the existing products are the outcome of prior innovation and is common with other competing products due to known features and characteristics, the competition is incredibly challenging. Thus, to produce something unique and innovative, yet economical, is indeed the thin line between commercial success and failure. It is widely known that there are secret ingredients for making the well-known fried chicken, ever popular cola drink, fashionable fragrance or remembering brand of bourbon. It is fact that not for the conventional IP right, but for the trade secrets such products are stepping up the business ladder.
The concept of a trade secret pronounced by the courts based upon the US definition of ‘trade secrets’ laid down in the Uniform Trade Secrets Act 1970, and the definition of ‘undisclosed information’ expressed in Article 39(2) of the Agreement on Trade Related Aspects of IP Rights, to which India is a signatory country. Trade secrets have been conceded as information having commercial value and are not in the public domain. The business house has taken reasonable steps to maintain secrecy. There are three conditions to denote trade secret:
- Commercial Value – Like other intangible property (e.g. Goodwill), It has impact on business profit.
- Unknown – A trade secret should not be known to the public.
- Maintain Secrecy -Reasonable steps should be taken to maintain the confidentiality.
Legal remedies available in India for trade secret
- Civil Remedies – An Injunction from the Indian courts is based on certain basic principles formulated in the Code of Civil Procedure 1908.
- Criminal Remedies – A legal proceeding can be brought under Section 378 of the Indian Penal Code 1860 for theft but the trade secret should be in physical Form. A proceeding for criminal breach of trust under Section 408 along with Section 420 alleging cheating can be brought.
Preventive Measure – An effective method available to protect trade secrets, is creating non-disclosure agreements with employees or third parties. Such restrictive measures can be enlarged to impose restrictions on a former employee following termination of employment.
In India, unlike other types of Intellectual Property Right, the protection of trade secrets evolves from Indian jurisprudence rather than legislation. The Indian courts have protected the trade secrets from time to time in appropriate circumstances but the law on this issue is still at a nascent stage in India. The Iplawsindia, an academic research wing of Biswajit Sarkar IP Law firm has taken the initiative to organize an online speech on Trade Secrets , an interesting concept of Intellectual Property Rights which is still in its developing stage in India where the Mr. Donneell, the former director of IP, Nokia, would like to explain the reason why a trade secret should be made a part of IP regime. Intellectual Property is that branch of law jurisprudence which should protect the trade secrets. Time and again, the Indian judiciary, by looking out to various foreign legislations and judgments, has tried to complement that gap. The speech will highlight the various aspects of such protection in European Union or in the USA, which would be a future guideline for India. The speech will also cover the various cases where the protection of trade secrets has been protected by the courts across the globe. To create the protection of trade secrets, the National Innovation Bill, 2008 was brought in India but made no progress afterwards. The only way to protect the trade secrets in India, is by other legislations only.
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