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Understanding trade secret protection in india

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Understanding trade secret protection in india

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Understanding trade secret protection in india

  1. 1. R.Vigneshwaran 4th Year, B.A.LL.B (Hons.) Tamil Nadu National Law University.
  2. 2.  Maintaining Confidentiality in business is one of the most controversial talks all over the world in the day to-day competitive business environment.  Each business might want to know its rivals’ privileged insights of progress, including any proprietary information of commercial value.  “Secrecy in itself confers commercial success of a business and provides adequate protection to the business” - John Richard Brady and Ors. v. Chemical Process Equipments AIR 1987 Delhi 372
  3. 3.  The information of secret should not fall into public domain [Secret].  The information has actual or potential commercial value [Commercial value].  The information has taken reasonable steps to maintain secrecy. [Reasonable Steps].  “ Novelty of information is not essential, but it should be inaccessible”. C.L: Saltman Engineering Co. Ltd. v. Campbell Engineering Co. Ltd. (1948), the court held in this cases that “it is perfectly possible to have confidential document, be it a formula, a plan, a sketch or something of that kind, which is the result of work done by the maker upon materials which may be available for the use of anybody … what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process.
  4. 4.  There is no legislation per se for this Trade Secret.  Protected under Section 27 of the Indian Contract Act  Restricts person from disclosing it to the outside work.  Doctrine of Confidentiality – A rule of equity  C.L: Coca v. Clarke (1969), the court pointed out that, “confidence is the cousin of trust”.  Illustration: A B C (3rd Party who is not mentioned in the contract but got the secret information from B, where there exist contract only between A and B for not disclosing confidential information)
  5. 5.  Referred the Court of Appeal in the case of Faccenda Chicken v Fowler, the court was of the opinion that “undertakings by the employee that he would not, upon leaving the employment, set up or join a competitive business, solicit former customers or disclose or use trade secrets, are enforceable only if reasonably necessary to protect the employer; otherwise they would be undue restraint of trade and so void as contrary to public policy. Such covenants must not be wider in scope, in terms of types of business excluded, duration and area of operation, than is reasonably necessary to protect the employer. The employer shall be protected even in absence of such covenant”.
  6. 6.  “A person who has obtained information in confidence shall not use it as springboard for activities detrimental to the person who imparted this information. The springboard remains even when all the features have been published or can be ascertained by actual inspection by any member of the public”.  C.L: Precision Engineers v. Delhi Jal Board and Anr. 2003 (1) ARBLR 606 Delhi, 103 (2003) DLT 129, John Richard Brady and ors. v. Chemical Process Equipments, AIR 1987 Delhi 372, Michael Heath Nathan Johnson v. Subhash Chandra And Ors. 60 (1995) DLT 757, Ratna Sagar Pvt. Ltd. v. Trisea Publications and Ors. 1997 (1) ARBLR 30 Delhi, 64 (1996) DLT 539
  7. 7.   C.L: Stevenson Jordan and Harrison Ltd. v MacDonald and Evans, drew a dividing line between the information acquired by employee personally and confidential information of the employer. It was laid down by the court that “if the information which had developed was the result of the employee’s skill and experience, he would be free to use it for his own benefits”. That is if an employee gains any skill and idea over the course of employment, by his own he can very well disclose to others and it will not be considered as a breach of confidential information.
  8. 8.  National Innovation Act, 2008  National IPR Policy, 2016  Trips Plus Agreement.
  9. 9. “When it comes to intellectual property rights, not everything that glitters is gold” Dr. Benjamin Mitra-kahn Thank you Vigneshwaran