SCHOOL OF LAW

PROJECT WORK OF CONTRACT

NAME – KRISHNA PARNAMI AND KRISHNENDU

GHOSH
ROLL NO. – R450217053 AND R450217054
SAP ID – 500061262 AND 500062163
STREAM – BA LLB (H) with specialization in ENERGY
LAWS
BATCH - 1
SEMESTER – 1
TOPIC – CONTRACT OF CONFIDENTIALITY
UNDER THE GUIDANCE OF
CHARU SRIVASTAVA MA’AM
 CONTENTS
 CONTRACT OF CONFIDENTIALITY
 WHO WILL KEEP THE TRADE SECRETS AS SECRETS?
 WHAT AMOUNT OF TIME SHOULD BE ALLOWED?
 DISTINCTION BETWEEN TRADE SECRETS AND CONFIDENTIAL INFORMATION
 CASE STUDY
 CONCLUSION
 CITATION
 CERTIFICATE
 CONTRACT OF CONFIDENTIALITY
It stands for maintaining the essential facts, for which the contract has been entered into, as secrets. It may
include trade secrets, the very quintessential element of business for which the business is running.

WHO WILL KEEP THE TRADE SECRETS AS SECRETS?

As stated above trade secrets are the vital components of the business and the existence of business
depends on its confidentiality. It is quite natural that a large number of people are hired as employees in
the business so a number of people will automatically come to know about the secrets. So if a company
enters into a contract with the employees that they won’t share the secrets with any other person, specially
with the competitors, during the course of the employment as well as after that person leaves the job or is
fired or gets retired, for a certain reasonable period of time then this type of contract is held to be valid.
This type of contract is essential to keep the business alive.

WHAT AMOUNT OF TIME SHOULD BE ALLOWED?

But the question arises how much restraint should be put on the employees and on ex employees? For
employees it is considerable but for the latter ones, how much? Whether it’ll be for 2 or 5 or 10 years or
for the life time? Whether that person will be barred from entering that industry for a particular period of
time or for the whole life?

DISTINCTION BETWEEN TRADE SECRETS AND CONFIDENTIAL INFORMATION

The following factors should be kept in mind before deciding which information should considered as
trade secrets:

 The status of the employee and the nature of his work. 1

 The nature of the information itself.2
 Whether the employer impressed the confidentiality of the information on his
employees.3
 Whether the information could easily be isolated from other information which the
employee was free to use.4

Now it depends on the information which the employee has, to be considered as trade secret or not.

1
1 SIR FREDRICK POLLOCK & SIR DINSHAW FARDUNJI MULLA, POLLOCK & MULLA : THE INDIAN
CONTRACT AND SPECIFIC RELIEF ACTS 643 (Lexis Nexis 2013) (2012).
2
Id.
3
Id.
4
Id.
In the case Shree Gopal Paper Mills v SKG Malhotra 5 the defendant signed an agreement with the
company that he will not divulge any information obtained during the course of the employment.
Information means any information. The defendant worked as an apprentice for one year and left the
company. It was held by the court that the defendant didn’t gain any information as part of training or
otherwise which could be considered as trade secret and hence the defendant can’t be forced to pay the
damages for the same.
But on the contrary if the court finds that the information contained by the employee or ex employee is a
trade secret then the employer has the right to go to any extent to protect those trade secrets.
The following case justifies the above statement-
DEWS v FITCH6- It was held by the court that the restraint of the object is justified because the employer
had the knowledge of the trade secrets and it is necessary to prevent the exploitation of the secrets and
that of the business.
CASE STUDY
THE CASE OF APPLE.
Recently there was a terrorist attack and the FBI demanded from the Apple authorities to tell the process
as to ho tow to hack the iphone so as to get the information about the terrorist. But the apple authorities
said that they will hack the phone and give them the information, but not tell the FBI about that. This is
for quite sure that the apple products are highly safe and secure. If they tell their secrets then how will
they maintain their business, their business will collapse. This is their trade secret and why should they
tell others about it. If they tell that secret then the FBI would use that technique to extract information
about others.
But on the contrary it also holds true and should be kept in mind that certain acts and activities which are
for the welfare of the people are justified. In this case if the FBI is seeking that information then it is for
the betterment of the people.
THE CASE OF MAGGIE
Maggie as we know is liked by everyone right from children to elders. There are many such peer
companies who prepare the same but none taste the same as Maggie does. Why is this because Maggie
has some very special ingredients which it puts to make it delicious and unique. This uniqueness is their
trade secret and if anyone knows about it then action can be taken to stop him or her and to protect its
business.
THE CASE OF COCA COLA
It is considered as one of the world’s most sought after drinks. Naturally its uniqueness gives it that
status. That uniqueness or the secret of that uniqueness is kept in a vault. This is the trade secret which is
essential for the existence of the company.
CONCLUSION

5
AIR [1960] SC 61 (India).
6
[1902] 2 Ch. 159.
In this sector more laws and regulations are necessary for stringent actions and to look so that any needy
person who actually needs job is not harassed. The information should be distinguished and only those
core informations should be termed as trade secrets.

CITATION

The citation followed while preparing this project is BLUE BOOK 19 TH EDITION.

CERTIFICATE

This is to certify that the Project work, CONTRACT OF CONFIDENTIALITY has been solely
and independently prepared by KRISHNA PARNAMI & KRISHNENDU GHOSH who are the
students of BA LLB (H) with specialization in ENERGY LAWS, B1 and is true to the best of
their knowledge.

SIGNATURE OF THE SUPERVISOR