These is no substantive authoritative separate statute to deal with trade secrets. How are, then, trade secrets (a form of intellectual property) sought to be protected in India?
CS Professional · Intellectual Property Rights - Laws and Practices · PYQS · June 2023
These is no substantive authoritative separate statute to deal with trade secrets. How are, then, trade secrets (a form of intellectual property) sought to be protected in India?
Answer & Explanation:
Trade secret law safeguards technological and commercial information that is not commonly recognized in the trade and prevents others from commercially exploiting it without authorization. The purpose of trade secrets protection is to promote research and development by protecting the source of business information and to uphold proper business ethics. A trade secret, or confidential information in the trade, must contain secret information that no one else knows about, it must have commercial value, and reasonable measures must be taken to safeguard the secret. A formula, pattern, compilation programme device, method, or technique that derives independent economic value from not being known can be recognised as a trade secret. Hence, trade secrets can be understood as Intellectual Property rights on confidential information which may be sold or licensed. These are the following legislation which have a connection with trade secret: The Indian Contract Act, 1872 The Indian Penal Code The Indian non- disclosure agreement (NDA) or Confidentiality Agreement (CA) - such agreement is signed first before signing of any commercial agreement of substance involving critical business relations for development of design of products, or for mass production on contract basis. These basic agreements for protection of trade secrets are covered under the Indian Contract Act, 1872 (Sections 27) The Indian Penal Code (Sections 408, 415) The copyright Act, 1957 (Section 51, 55, 63) The Design Act, 2000 The Information Technology Act, 2000 (Section 65-72) The Competition Act, 2002 (Section 3) The Civil Procedure Code, 1973 Misappropriation of trade secret can be understood as discovery of trade secret by improper methods, which is not covered by any specific law. Therefore, the common cause of action against misappropriation or unauthorized disclosure of trade secrets includes civil action for breach of contract and wrongdoing due to misappropriation; and criminal action for theft and breach of trust. In India, there is no uniform legislation protecting trade secrets and confidential information. It is protected by numerous, disparate provisions of various statutes. Indian courts have recognized trade secret protection based on equity principles and common law remedies for breach of confidence and breach of contract such as Section 27 of the Contract Act, 1872, which states that, covenants shall be structured in such a way that they protect the firm's confidentiality while also allowing the employee to work in his preferred profession. Businesses have trade secrets that must be protected, which is why it is necessary to include a restrictive clause in service contracts to ensure that the firm's trade secrets are adequately secured. In the case of Richard Brady v. Chemical Process Equipment Pvt. Ltd. , the Delhi High Court went farther by invoking a broader equitable jurisdiction and awarding an injunction in the absence of a contract. Non-compete covenants, non-solicitation covenants, non-poaching covenants, and confidentiality covenants are all examples of restrictive covenants. The courts have recognized client information kept in databases as copyrightable material under the Copyright Act, 1957, implying indirectly to protection of trade secrets and confidential information from disclosure/infringement. India also requires formal legislation along the lines of the UTSA (Union Trade Secret Act) to deter the illegal transfer of trade secrets by individuals who has access to them as part of their employment responsibilities. These steps, in conjunction with provisions relating to breach of contract or Non-Disclosure Agreements, can help promote a culture of respect in industrial circles for trade secrets and undisclosed information as proprietary assets belonging to their owners. Without specific legislation, this is likely an area in which India falls short in its defence of intellectual property rights.
Topics: Trade Secrets
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