Trade Secrets
By: Yesheshvini Ojha
Tags: Trademark, Intellectual Property Law, Startup, Patents

A trade secret is a vital piece of information of your business you have that makes your business unique and different from competitors and is undisclosed.

What are trade secrets?

A trade secret is vital information kept undisclosed for maintaining exclusivity over it. This exclusivity ensures influencing the market for the product. This information is specifically concealed to avoid competitors have the advantage over it. Therefore, such secret is usually the composition or contents of a particular product that has a tremendous liking in the market over its other substitutes.

The exact definition of trade secrets is as follows-

A trade secret is a formula, practice, process, design, instrument, pattern, commercial method or compilation of information which is not generally known or reasonably ascertainable by others. This trade secret acts as an economic advantage over customers and competitors and scope for them is virtually unlimited.

Protection

With recent advancement in technology and the amount of information exchange that happens it has become difficult to protect trade secrets. A lot of them find it challenging to protect it and ensure that information stays confidential. The ease of transfer of data does not help either. The protection of this information should not just from external but also from internal sources.

Various laws , today focus on protection of such information. India has no specific law specifically for trade secrets . However there are some enactments that indirectly protect such information within their rules. These are contract law, copyright law and principles of equity.

The remedies available to the owners of trade secrets are:

an injunction preventing a licensee, employee, vendor or other party from disclosing a trade secret;

the return of all confidential and proprietary information; and

compensation for any losses suffered due to the disclosure of trade secrets

Copyright law and trade secrets

When it comes to the copyright law, the courts have recognised that client information stored in databases will be treated as coyrightable material.

Similarly, when during the course of operation, if an organisation collects data which they arrange properly and is accessed electronically. These could be anything from inventory to customer behaviour. Therefore, databases are an essential part of businesses. Databases are protectable under copyright law. Section 2(o) of the Copyright Act 1957 defines compilations, including computer databases, as “literary works”. In theory at least, the treatment of databases as trade secrets can be a stronger form of protection, since it helps to protect the underlying or inherent data rather than the mere form of expression or layout protected by copyright law.

Generally, while such a suit of violation or use of such a trade secret or database is found, it is important to understand what essentially has to be done in the same. Primarily, it should make the confidentiality of the information has to be proved. Further, there has to be proof of reasonable steps take n to ensure the protection of the same. this shall establish the quality of information and its confidentiality.

The road ahead

Being the signatory to the Paris convention, under Article 1(2) of the Trade Related Aspects of Intellectual Property Rights (TRIPs) states that intellectual property shall include protection of undisclosed information.

However, the 1989 General Agreement on Tariffs and Trade discussion paper on India establishes that trade secrets cannot be considered IP rights, because the fundamental basis of an IP right rests in its disclosure, publication and registration, while trade secrets are premised on secrecy and confidentiality. The paper goes on to state that the observance and enforcement of secrecy and confidentiality should be governed by contractual obligations and the provisions of appropriate civil law, not by IP law.

In 2016, India has approved the National IP Rights Policy. This policy envisages an objective that includes identification of important areas for research which includes trade secrets.

Conclusion

There is definitely an absence of a specific trade secrets law in India. It focuses more on judiciary based law which involve principles like that of equity and common law actions against breach of confidence. this involves also the fact that employees as an internal factor have duties and obligations towards such information.The things unclear are the scope of damages, theft by competitors and procedural safeguards. We hope to see more development in this realm of law, soon.

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