Introduction
The quintessence of Intellectual property law encloses various rights which include patents, trademarks, copyrights, geographical indications, designs, and also trade secrets. Further, these rights can be categorized under Intellectual Property Rights, which are governed and directed by legislation. These Intellectual property rights are further governed under common law, which is derived from precedents and customs.
One of these Intellectual property rights is trade secret, which plays an extensively important role in the growth of a company, and in some cases, it is even critical for the company’s survival. A trade secret may be referred to as an instrument, process, information, design, practice, or data related to business that is kept away from the public, and further the owner attempts and tries to keep it a secret and confidential.
Trade Secret
Generally, a trade secret can be defined as, “information of commercial value to be kept secret”. This information could be comprised of consumer details, the number of consumers and suppliers, networking details, advertising plans, and further information consisting of manufacturing processes[1] and any technological expertise. Varying from other Intellectual property rights such as copyrights, patents, trademarks, etc, trade secret law is not specifically a right because there are no exclusive rights[2] assured to the owner.
In Tata Motors Limited & Anr v. the State of Bengal[3], The KolkataHigh court defined the tern trade secret according to by referring Black Law dictionary as“trade secret is a formula process, device or other business information that should be kept confidential to maintain an advantage over competitors. The information further includes programs, devices, methods, compilations, compilations, processes or secret food recipes which should not be known to the public and held secret with the created owner”.
Trade secrets are a subclass of “confidential Information”. Some of the courts in India have utilized and used the terms ‘trade secret’ and ‘confidential information’ interchangeably, while some other courts differentiated the meaning of these two terms and held that common, daily affairs of an employer, which are usually known to others cannot be included under the definition of the trade secret.
Laws Governing Trade Secrets in India
The only way to protect the trade secret laws in India is through invoking section 27 of Indian Contract law as there are no particularly stipulated laws for the protection of trade secrets. This Section provides that the employee should not reveal any information related to the activities of the business and it restricts a person from selling the goodwill of the company and finally bars a person from carrying out similar business in the future. Unfortunately, there is no criminal liability to this section in case of breach of specific performance of contract involving trade secrets. Hence, there is a high time and need for the implementation f trade secret laws in India.
Need of Trade secret law in India
Maintaining Secrecy and confidentiality in trade or business is one of the most debatable tasks in the day-to-day competitive world. Under this prevalent market dominion with inevitable competition, every business corporation is looking forward to obtaining and maintain confidential information. They are only allowing core and peer members of the company to know the secrecy of the trade where else other members are not allowed to know the trade secret.
Under the widespread market regime in the business environment, each business wants to know its competitor’s privileged perspicacity of their progress, which includes information related to commercial value. These trade secrets are scrutinized to be more important when compared to other forms of Intellectual Property because all the trades and sectors of commercial business have their copyrights, trademarks, patents, and designs over their products but maintaining secrecy makes it more unconventional when compared to other intellectual property rights. So, to maintain and protect these trade secret laws there are no specific laws for governing them. Though there is a section under contract law, it only protects trade secrets through entering into a contract. If there is secrecy is revealed then there is a breach in a contract but not a breach in trade secret law. Therefore, there is a high need for laws governing trade secret laws in India.
In one of the foreign cases, Waymo v. Uber Technologies & Otto Motto[4], one of the faithful and core members of Waymo technologies robbed some files of the company and started a new start-up company. Later, Uber technologies hired this employee and came to know the secrecy of Waymo. There was a huge loss to Waymo due to this revelation of their trade secret. In this case, Waymo can sue Uber and can claim damages. On the other hand in one of the Indian cases, Roger Bullivant v Ellis[5], one of the subsidiaries of Roger Bullivant Company left this company and misused this company’s trade secret. But as no laws are governing the trade secrets in India, the court restricted the ex-employee of the company not to use information related to his previously worked company’s dominion.
If both the above scenarios are compared, then without any complication it can be admitted that there is no particular law governing bodies in the context of protection of trade secrets. If there is any breach in trade secrecy in India, then all the courts have no choice but to rely upon this section 27 of Indian Contract law. The main difference in the above two case laws is that the US had well-governed laws related to trade secrets but in India, there are no laws which are protecting trade secrecy. So, it is high time for the implementation of laws governing trade secrets.
It is highly inappropriate to admit that India is not making any laws related to trade secrets protection, India is making some acts and bills for trade secret protection such as the “National Innovation Act, 2008”, which was made by the Indian Parliament and deals with the Confidential Information under chapter IV. According to the United States Trade Representative’s report 2017, the biggest and the foremost issue was the lack of a framework of legislation regarding the protection of trade secrets in India. The ideology of “A policy for the protection of Trade Secret” was highlighted in the recent policy of National IPR Policy, 2016. Regardless, of these bills, Acts and policies there are no particularly stipulated and enacted laws for the protection of trade secrets in India. Hence, it should be admitted that there is a high necessity for the need of trade secret laws in India
Conclusion
The protection of trade secrets is considered very significant and crucial for the basic reason is that it paves way for innovations, inventions, and technologies, it also promotes and encourages commercial ethics, and finally improves the standards of the regime of Intellectual Property.
The current scenario of India is very difficult as, without the implementation of legislation regarding the trade secret, it is highly impossible the protection of trade secrets. The position of trade secret law in India is still in the initial stage, and the laws and legislations governing the trade secrets are also very inconsistent and are not very stringent. Therefore, there is utmost need for regularizing and implementing these laws for the protection and safeguarding of Trade Secrets.
Author(s) Name: Keerthi Gandreti (Damodaram Sanjivayya National Law University, Visakhapatnam)
References:
[1]http://www.wipo.int/sme/en/ip_business/trade_secrets/trade_secrets.html
[2]Friedman, David D., William M.Landes, and Richard A. Posner, “Some Economics of Trade Secret Law”, [1991] 5 (1): 61-72
[3]Tata Motors Limited & Anr v. State of Bengal [2008] WP No. 1773
[4] Waymo LLC v. Uber Technologies Inc., OttoMotto LLC & Otto Trucking LLC [2018] 3:17-cv-00939
[5]Roger Bullivant v Ellis(1987) ICR 464
