HEINONLINE DATE DOWNLOADED: Mon Now 30 12:47:41 2020 SOURCE: Content Downloaded from /isi00in Chatons: Bluebook 21st ‘Abhijest Kumar & Adria Mishra, Protecting Trade Secrets in India, 18 J. WORLD INTELL, PROP, 335 (2015) ALWO 6th 08 Kumar, A Mishra, A... Protecting rade secrets in india, 18(6) J. World Intel Prop. $35 (2018), APA Tth 0 Kumar, A. & Mishra, A. (2015). Protecting trade secrts in india. Journal of World Intollectval Property, 18(6), 335-246, Chicago 7th 04 ‘Abhijeet Kumar; Adrja Mishra, "Protecting Trade Secrets in Inia," Joumeal of Wore Intellectual Property 18, no. 6 (November 2015): 335-246 MeGil Guide oth ee ‘Abhijeet Kumar & Adria Mishra, "Protecting Trade Secrets in Ina” (2015) 188 J ‘World intel Prop 325, AGLE Ath og ‘Abhijeet Kumar and Adrja Mishra, ‘Protecting Trade Secrets in indi’ (2015) 18(6) Journal of World Iniectual Property 335, MLA Bin od. Kumar, Abhijeet, and Acija Mishra, Protecting Trade Secrets in Incia.* Journal of World intelectual Property, vol. 18, no. 8, November 2015, p. 335-348, HeinOnline OSCOLA Ath os Abhijast Kumar and Adrja Mishra, ‘Protecting Trade Secrets in inca (2015) 18 J Worl intel Prop 335 Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at tps/fhoinonline.orgOL/Liconso ~The search text of his PDF is generated from uncorrected OCR tex = To obtain permission to use this article beyone the scope of your license, please use:PROPERTY ‘Tre Joumal of World Intlectua! Property {2015} Vol. 18, no. 6, op. 336-346 dot 10.11 1Vvip.12080, Protecting Trade Secrets in India Abhijeet Kumar ‘Advocate, Patna High Court, India Adrija Mishra Advocate, Ocisha High Court, nda ‘Trade seeretisthe need of today’s globalised economy. Attimes developers/inventors does not want to get the product! process patented, because of primary requirement of complete disclosure. Trade Secret isa one step solution toall such issues. Unfortunately, the concept of providing protection as trade secret has seen development in strong economies ‘only. Through this paper authors would like to explain the reason why a trade seret should be made apart of I regime. Intellectual Property is that branch of law jurisprudence regarding which is stil in its developing stage i India, Time and again, Indian judiciary, by looking oat to various foreign legislations and judgments, has trie to fill in that gap. The article will cite examples from the cases as they have been decided by the Indian Courts, while relying on the development of law by courts in European Union or in USA. One bod step was taken by the parliament in this regard that is, National Innovation Bill 2008, bu Bill lapsed without being abled only, forcing the protection of trade secrets by other available legislations only. The paper also tres to provide some suggestions to remove the ambiguity and make a way ahead in this regard Keywords trade secrets; National Innovation Bill 2008; Indian IP regime With the advent of globalisation, businesses started stepping out of their insular moulds. With the flourishing businesses, it became essential to have an effective trade secret protection. In the simplest terms, trade secret refers to that important information which is beneficial for the company who is doing the trade and which needs to remain confidential for the benefit of the company. The trade secret differs (on the basis of business or trade which is being carried out, This factor contributes to the diversified scope of trade secrets and hence it has been difficult to assign a specific definition to the term. However, with development there arose a need to regulate the trade secret norms which requited codification of the term. The history of codified evolution of the trade secret protection can be traced back to Article 10 bis of Paris Convention, and the jurists have often treated the terms “undisclosed information’ and trade secret synonymously. Further, in the Uruguay Round of General Agreement on Tariffsand Trade (GATT), the Trade-Related Aspects of Intellectual Property (TRIPS) and the North American Free Trade- Agreement (NAFTA), have also made an attempt to codify the provisions with respect to protection of trade secrets (Zafar ef al., 2011), United States model federal law on trade secret protection, that is, Uniform Trade Secret Act, defines trade secret as any information related to a trade that includes any formula, method or procedure of ‘making a particular commodity and that formula has its own value and the method is unknown to common people (National Conference of Commissioners on Uniform State Laws, 1985) Trade secret can be understood as that essential information of the company, which if disclosed ccan benefit the competitors and lead to loss of business of the former company which possessed the trade secret, Secrets or confidential information depend on the circumstances of each case. In a general view, in order fo maintain an advantageous position over the competitors, it is a formula, technique, device, process or other business information that is kept confidential (The European IPR Helpdesk, 2012), 12018 John Wey & Sons id 25Abnieet Kumar and Ace Mishra Protecting Trade Secrets in India Know-how or the technique used is one of the essential areas which is usually protected under the realm of trade secrets. Know-how is related o a particular production process ora specific type of product, Which ean be any unique knowledge andor skills, in egard tothe product, services or even manufacturing process, AS know-how ages rather quickly, itis nether advisable nor i is valuable to get a patent protection on them (Engelfiet, 2007). In a leading ease, the Delhi High Court made efforts to define trade secrets as, such unknown formulae, technical or functional know-how or any particular mode or method of business, which is adopted by an employer and further protected (American Express Bank Ltd. v Ms. Priva Purt, 2006) Justice Staughton differentiated trade secret from confidential information by eharacterising it as information which, if disclosed to a competitor, would be lable to cause real or significant harm to the owner of the secret. It must be information used in the trade or business, and the owner must limit the dissemination of itor at least not encourage or permit widespread publications (Lansing Linde Ltd v Kerr, 1991), Need of Protection The question which arises now is why there is a need of trade secret protection, As trade secrets are important to the business of a company, its protection is also equally necessary. Let us take the example of Coca-Cola company which has been hitting headlines frequently and is known for establishing the creditability that trade secrecy can be ensured, The trade secret of Coca-Cola, its formula, has been locked {na vault ofa bank in Atlanta, access to which is only with two employees at any particular time and which is subject to prior resolution from the Board members (Stim and Fishman, 2014). Names of the employees hhaving access to the vault is unknown to the general public and as a further secrecy measure, both of them are not allowed to board the same air plane (Stim and Fishman, 2014), So it can be inferred that companies take such extreme steps for protecting their trade secrets, Protecting Trade seerets is important like other forms of intellectual property but atthe same time itis essential to distinguish between Trade secrets and other forms of intellectual property rights. Trade secret is more like protection of good will and brand name and for doing the same it requires an enterprise to establish security measures and then maintain it (De, 2010). Trade secrets need permanent endeavour in order to allow protection by lawsuits against infringers ata later time, rather than a single application and grant by a federal ageney (The Trade Secret Office, 2012). ‘To understand the importance of protection of trade secrets we can look into statistical information where Companies spend billions of dollars per year for ensuring that their trade secrets are well protected and beyond the reach of others. Companies opt for passwords, dongles, secure facilities, security guards, name badges, and internet firewalls to lock trade secrets up more securely (De, 2010), Trade Secret and Existing IP Regimes ‘Trade secret protection offers much broader scope than other forms of intellectual property. Forexample- ‘Trademarks refers to a product or service in commerce, and protect the same by protecting only the printed word or image associated thereto (De, 2010). As far as Copyright goes, the protection is given only tothe ‘manner of expression and it does not include init the content of the protected work as such, which allows and requires the idea, information or concept to be communicated, while Trade Secrets are eternal (Roy. 2006), For the purpose of protection, trade secrets need not fallin any category of subject matters which are patentable (De, 2010), and their protection requires no disclosure. The generic test of patentability, that is, novelty or non-obviousness does not apply, but they are only required to be useful. Through trade secrets, © 2018Joh Wey & Sans Lia 336 The Jounal of Wo Intec ope 12018) Vl 18, 90.6Protecting Trade Secros in india ‘Abnjeet Kumar and Ada Msrro an enterprise ean protect the expression as well as the content of the information useful for the business (Roy, 2006), Trade Secret and Trademark A trademark refers o.a good or service tha is publicly known and accepted. Its formally connected wit specific company or business group. On the other hand, a trade secret has a much wider spectrum, and as the name suggests, i is unknown fo the public ‘Trademark rights may be used fo avoid others from using an identical mark, but not to stop others from ‘manufacturing the same products or from advertising the same goods or services under a plainly different mark, Trademarks which are used in throughway or overseas commerce may be registered with the Patent and ‘Trademark Office, as provided under the Trademark Act, 1999 (Krishna, 2007). On the other hand companies and persons guard information, important for the business. or commercial transaction, which cannot be protected under any other IP legislations, as a trade secret. The scope of trade secret is very wide, ranging from any initiative that will help the enterprise in taking a lead against its competitors to an idea of developing software or a website on any particular issue (Verma, 2002). Trade secret also gives protection to business information that are supposed to be accessed by only certain employees, and which are very important for the company and vulnerable too, such as marketing plans, costs, and pricing ete, Trade Secret and Copyright Protection under Copyright law is for creative work of the author, which includes “music. paintings, sculptures, books, computer sofiware, architectural drawings and motion pictures’ (The Copyright Act, 1957). Although the work gets a protection under copyright automatically, but in order to avail the benefits provided in the legislation, the author is needed to register the work with the appropriate authority (Zafar eral. 2011). Trade secrets, on the other hand, are the confidential information which is not easily available to the mass and where sufficient and reasonable steps have been taken by the owner of such information to protect it from getting into public domain, ‘Trade secrets do not require registration but do require reasonable secrecy measures which a company undertakes (Pai and Seetharaman, 2004). Trade Secret and Patent “Trade seeret protection i often argued to overlap with patent protection, as both are individually sufficient to protect @ new innovation. But when compared, protection under patent law is subjected to the many tests, primarily beginning from the subject matter of protection (Bhatnagar, 2004, p. 518). However, the protection of trade secret is having no such criteria and thus the seope is comparatively wider. Patent protection is granted generally to only technical innovations, under the Patent Act, 1970, which has to pass the test of novelty, inventive step and utility or industrial application (Krishna, 2007a). Both technical as well as non-technical information, such as business plan, marketing strategy etc. can be protected as a trade secret. Software and activities incidental thereto can be protected by both patents and trade secrets ‘Another point of diference is that, for anything to be protected under the provisions of patent law, information regarding the same needs tobe disclosed completely through publication in patent application (World Intellectual Property Organisation, 2004), Still, asthe virtue of legislative protection, no third party can misuse the information so published during the term of protection to the same, On the other hand, a trade secret has its own advantages. One of them being the term of protection, ‘Which cannot be imposed on trade secrets thus letting the holder keep it as a secret, as long as he wants, ‘Meanwhile life ofa patent is limited to 20 years from the date of filing. Also, trade secrets can be less expensive to protect and to enforce in the cases of misappropriation (Lakshmikumaran, 2004) {©2018 Joho Wey & Sons Lt Tra Jou of lis tee Popeny 0181 V1, 986 337Abnieet Kumar and Ace Mishra Protecting Trade Secrets in India At last, it can be said that the owner needs to carefully consider various factors before choosing any. mode of protection. These factors include, but are not limited fo, subject matter which needs to be protected; whether a reverse engineering is possible or can it be developed independently; will it bbe possible to maintain such a secret; what isthe commercial value of having such secret and protecting the same, etc. Only when these issues have been dealt with by the holder, it can decide what is best needed for the business (Charlesworth, 1991, p. 637). Protection to Trade Secrets: Indian Scenario ost the phase of liberalization and globalization, the markets have become exceedingly competitive and so has been the expansion in business dimensions. Considering such a situation, companies and other ventures involved have to share some essential confidential information for their effective functioning with other people. This information needs to be protected so that such sharing does not prove detrimental to the company’s interests, Due to limited scope, intellectual property rights like copyright, patent and trademark cannot protect this information. ‘Thus, as discussed earlier, this information can be protected under the ambit of Trade Seerets only (Pai and Seetharaman, 2004), Presently, there are no laws in India which deal specifically with the protection of trade secrets, However, the law of trade secrets is derived from the basic principles of the law of torts, restitution, agency, quasi-contract, property and contracts (Pai and Seetharaman, 2004), Thus there are various civil and equitable remedies which are available to the aggrieved persons in such situations under various other legislations. Some of these available remedies have been enlisted herein. The Contract Aet, 1872 In India, the trade secrets are mostly governed by the Indian Contract Act, Section 27 of the Indian Contract Act, 1872, which reads as: Agreement in restraint of trade, void-Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is 10 that extent void. Exception I: Saving of agreement not 10 carry on business of which good willis sold—One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving ttle tothe goodwill from him, carries ona like business therein, provided that such limits appear t0 the court reasonable, regard being had to the nature of the business ‘This section primarily talks about agreements which are made in restrain of trade are void. However, the exception provided herein enshrines the principles of trade secrets. This clause is basically in consonance with the Constitution by allowing freedom to exercise a lawful profession, trade or business (Bhadbade, 2004, pp. 818-822), Nevertheless, at the same time it also altempis to protect the interests of the person who has sold his goodwill to another. So herein, if a person has acquited any knowledge by beeing a part of the company, then he cannot use that knowledge as a head start for another business and prove detrimental to the earlier company (Bhadbade, 2004, pp. 818-822). Basically this sections paves ‘way for the construction of non-disclosure agreements and the non-compete clauses (Verma, 2002) Inthe ease of Krishan Muruga the plaintfT had employed the defendant asa manager under the terms of a contract which had two essential clauses; firstly, that defendant would not join or run a competitive business for two years in the vicinity of his employment by the plaintiff and secondly, would not reveal secrets of plainti?s trade to anyone (Krishan Murugai v Superintendence Co. of India Pvt. Ltd, 1980), © 2018Joh Wey & Sans Lia 338 The Jounal of Wo Intec ope 12018) Vl 18, 90.6Protecting Tro ‘Secreta in India ‘Abnjeet Kumar and Ada Msrro Unfazed with the terms, defendant started identical business wit the plaintiff's competitor and employed the techniques learned during previous employment. Thus, based on the terms of employment contract, the plaintiff filed a suit against the defendant, demanding injunction on defendant's trade practice. Defendant rebutted the suit arguing that the said employment contract was void, being in restraint of trade by the virtue of provisions of Section 27 of the Contract Act. ‘The court based its judgment on the jurisprudence related to contract laws and held that through ‘amendment in Section 27 of the Contract Act, the provision of reasonable restraint of trade was removed. [Now there is only one exception in the statute, that is, the seller of goodwill of a business may agree to a reasonable restriction of his trade, While a negative covenant or a restraint put on additional employment, during the term of employment, is allowed, a restrictive covenant, putting a restriction on the employee to get into the same or similar business after leaving the employment is not allowed (Ministry of Law and Justice, 1958, para 55), ‘This case struck a difference between a contract of service and a contract for the sale of business and clearly held that English laws, in as much as it is not in agreement with the absolute terms of Section 27, is irrelevant (Bhadbade, 2004, pp. 818-822). It went on, however, o examine the circumstances asstiming the principles of English law to be applicable. The court went on saying that this was not acase relating to trade secret as the defendant did not have any training and was not doing any mechanical work and moreover the customer's list issue could only be considered if the defendant had some kind of influence over them, which the plaintiff's were not able to establish. The High Court and the Supreme Court as well, denied injunction inthis ease, ‘Supreme Court, relying upon Niranjan Shankar case (Niranjan Shankar Golakari v Century Spinning ‘and Manufacturing Co. Ltd, 1967), while delivering judgment in Krishan Murugai case (Krishan Murugai v Superintendence Co. of India Pvt. Ltd, 1980) held that, “the injunction operating after the period of service was confined tothe divulgence of rade secrets only. In the present case, no such trade secrets have been shown to be imparted fo the defendant.” (Zafar et a, 2011). ‘The Apex Court further held that ifthe plaintiff pleads that there existed a trade secret, which has been passed to defendant, then under such circumstances plaintiff would be entitled to get an injunetion for not carrying on business based on these secrets. ‘The judgment of Krishan Murugai’s case was reiterated by court in case of M/s Ambiance India case (Mé Ambiance India Pvt Ltd. v Shri Naveen Jainand, 2008). Court here held that restraining condition imposed upon employee by the agreement was void and unconscionable (Lakshmikumaran, 2004), In John Richard Brady case Delhi High Court emphasized by saying that, by restraining defendants from abusing the know-how, specifications, drawings and other technical information regarding the plaintiffs company entrusted to them under the confidentiality agreement it would be in interest of justice ohn Richard Brady and Ors v Chemical Process Equipments Pvt. Ltd. and Anr, 1987). The Copyright Act, 1957 ‘The Copyright Act, 1957 has also made an attempt to protect trade seerets. In the case of Puneet Industrial Controls one of the issues raised was whether the defendants are responsible of breach of the plaintiffs Copyright under Section $1 (Puneet Industrial Controls Pvt. Ltd. v Classic Electronies, 1997). In this case the plaintiff, who was engaged in the industrialized and selling broad range of electric goods, suspected that his relative, misusing the trade secret and confidential information, had started his own manufacturing unit and started imitating the products of the plaintiff. The court held that as based on the evidences produced, it was clear to establish that the works actually belonged to plaintiff, which was copyrighted designs as well, and so an injunction was granted to the plaintiff against defendant's imitating the goods manufactured by plaintiffs. {©2018 Joho Wey & Sons Lt Tra Jou of lis tee Popeny 0181 V1, 986 339Abnieet Kumar and Ace Mishra Protecting Trade Secrets in India Common Law and Equity In celebrated case of Gujarat Bottling Co Ltd., Pepsi deliberately took over GBCX, while knowing its terms of agreement with Coca Cola, with the sole intention to damage the sale of Coca Cola in the geographical location and lessen the competition, GBC was considered to be in breach of the terms of agreement with Coca Cola, as it neither consulted Coca Cola before selling its share, nor did it let them know who the buyer was. On these grounds Coca Cola had said that it had the right to terminate the agreement, but prior to that it was served with a three-month notice by GBC for termination of agreements, ‘The High Court had ordered an injunction against GBC on dealing with both Coca Cola and Pepsi. On appeal the Apex Court, in the matter held that: Since GBC has acted in an unfair and inequitable manner in its dealings with Coca Cola, there was hardly and any oceasion to vacant the injunction order and the order passed by the High Court cannot be interfered with not even on the ground of closure of factory, as the party responsible, prima facie, for breach of contract cannot be permitted to raise this grievance (WS Gujarat Bottling Co, Ltd. & Ors. v The Coca Cola Co. & Ors., 1995). ‘The Courts can also grant injunction orders, ether permanent or interim depending on the facts of the case. In the Gujarat Bottling Case, the court has laid down the test for granting injunction, and has stated that, The grant of an interlocutory injunction during the pendency of legal proceedings isa matter requiring the exercise of discretion of the Court. While exercising the discretion the Court applies the following tests ~ () whether the plaintiff has a prima facie ease, (i) whether the balance of convenience is in favour of the plaintiff. and (ii) whether the plaintiff would suffer 4an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or no to grant an interlocutory injunction has 10 be taken at atime when the existence of the legal right assaited by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the triaton evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice tothe plaintiff during the period before that uncertainty could be resolved. The object ofthe interlocutory injunction is 10 protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour atthe trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having ‘been prevented from exercising his own legal rights for which he could not be adequately compensated. The Court must weigh one need against another and determine where the “balance of convenience” (M/S Gujarat Botling Co. Ltd. & Ors. v The Coca Cola Co. & Ors, 1995), Thus, we can see that in absence of any specific legislative provision to protect trade secrets, the judiciary has the right to exercise its diseretion based on reasonable grounds in deciding whether the trade secrets have been disclosed and the extent to which injunctions can be granted. Trade Secret and Indian Penal Code 1860 It may not be as strict a protection, but there are provisions in the Indian Penal Code, 1860 (LPC) which indirectly protects the disclosure of trade seerets by making criminal breach of trust and cheating a crime, vide different provisions, Provisions have been laid down under Section 408 of the Indian Penal Code, which makes criminal breach of trust by an employee, being a clerk or a servant, a penal offence. © 2018Joh Wey & Sans Lia 340 The Jounal of Wo Intec ope 12018) Vl 18, 90.6Protecting Tro ‘Secreta in India ‘Abnjeet Kumar and Ada Msrro Moreover, Section 415 talks about cheating, that is, if any person uses technical know-how in contravention of agreement of service then criminal liability can be attracted, In Garware Plastics and Polyester Ltd. case, the respondents were contending that the action of the petitioners amounts to criminal breach of trust and cheating as the technical know-how acquired by the respondents amounts to “property” (Pramod s\o Laxmikant Sisamkar and Uday Narayanrao Kirpekar v Garware Plastics and Polyester Ltd. and Anr, 1986), Court did not answer the question of whether a trade secret amounts to being a property or not, This decision was basically grounded upon the fact that the case hhad not satisfied the other requirements for attracting criminal liability under the said provisions. ‘The plaintiffs faifed to prove the dishonest intention on the part of the appellants, The court evades in deciding as to whether it would amount to ‘property’. But, the court had made an observation that if the petitioners use the technical know-how in contravention of the agreement of service, then that would attract Sections 408 and 415 and a penal punishment can be granted under the same provisions National Innovation Bill 2008: A Failed Attempt A Bill (National Innovation Bill, 2008) suggested in the year 2008, whose preamble read as: An Act to facilitate public, private or publie- private partnership initiatives for building an Innovation support system to encourage Innovation, evolve a National Integrated Science and Technology Plan and codify and consolidate the law of confidentiality in aid of protecting Confidential Information, trade secrets and Innovation (Department of Science and ‘Technology, 2008). ‘Thus the most important factor on whieh this bill Iooks int isto motivate “innovations”, There isa three-fold object herein, firstly it looks into motivating the public private partnership for the purpose of developing an innovation support system, develop a National Integrated Science and Technology Plan and further on to codify the law of confidentiality (Naniwadekar, 2008a, Part 1) It has been long, since India has been surviving without any law with regard to confidentiality. Looking at the present scenario and the urge for achieving large scale development, itis extremely {important to havea law which would regulate the confidentiality agreements within companies (Lex Orbis, 2008). There are many international companies which hesitate to step into India because of the mere fact that there is no adequate protection being provided to thei interests. Putting this Bill into force would let those companies ease out on the fear to lose their interests and would motivate foreign investments (Naniwadekar, 20080, Part 2). ‘The bill has some important definitions like that of appropriate government, angel investors, confidential information, misappropriation and so on. The Bill defines “trade secret” as, Confidential Information means information, including a formula, pattern, compilation, program device, method. technique or process, that: (a) is secret, in that its not, ax a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within circles that normally deat with the kind of information in ‘question; (b) has commercial value because itis secret and (c) has been subject to responsible steps under the circumstances by the person lawfully in control of the information, to keep ts ‘secret (National Innovation Bill, 2008, Section 2(3)) This definition though raises an issue as to whether information isto be treated as a property or not, but it does clearly have a taste of Article 39.2 of the TRIPS agreement (Trade Related Aspects of Intellectual Properties, 1995), {©2018 Joho Wey & Sons Lt Tra Jou of lis tee Popeny 0181 V1, 986 aaAbnieet Kumar and Ace Mishra Protecting Trade Secrets in India Is said that this bill would also call for an amendment in other acts which are already in force, This Bill alks about the National Annual Integrated Science and Technology Plan (NAISTP). In India, there isa very poor mechanism in practice when it comes to research. Hence, for this purpose, this bill has brought in the NAISTP, according to which the government has to submit a plan in the month of February wherein it ‘would explain the measures that the government would take for motivating research, This bill not only works on protecting trade secrets, but as its preamble suggests, it also emphasizes on the aspect of motivating research. Chapter 6 of this Bill talks at length about protection of confidential information. It states that the parties are free fo set in their terms and conditions in the contract with regard to protecting the confidentiality and preventing misappropriation of their trade secrets, Further on, section 9 talks about a situation wherein there is no contractual obligation. It states that ifthe information has been disclosed, then it becomes the responsibility of the person (o preserve such information and not fo disclose io the public at large. This tort of misappropriation has been in practice since a very long time. However, i is important to note here that the person shall only be liable when, “the information is both unknown in public, and is known to be confidential by the defendants” (Pai and Seetharaman, 2004) Section 10talks about the threatened misappropriation which might take place during court proceedings. Section 11 explains the exceptions to misappropriation of confidential information, which includes, “Confidential information shall not have been misappropriated where: (4) the Confidential Information was available in the public domain; or (®) the Confidential Information has been independently derived by the alleged Misappropriator, or by any third party from whom the alleged Misappropriator received the information; or (©) where disclosure ofthe Confidential Information is held to be in public interest by a court of law; "(National Innovation Bill, 2008, Section 11) Now, prior to this Bill, the claims for trade secret protection were brought in through confidentiality agreements or on grounds of breach of confidence. This bill does not realy bring in much change here. if we look at section 8(1) of the bill which says, ‘Parties may contractually set out the rerms and conditions governing rights and obligations in respect of Confidential Information, including with a view to maintain confidentiality and prevent Misappropriation, So as we ean see, there is not much of a change in the position of the parties. Prior to this Act, the parties assumed the same role. They had to contractually set out the terms for the confidentiality (Srivastava, 2008), Thus the problems which were being posed earlier would persist. There can be @ situation wherein the employee can pull out the strings of Section 27 of the Indian Contract Act and call the agreement to be void (Nishit Desai Associates, 2008), ‘Though the bill does not bring in a huge change in the existing scenario, but the step which has been taken of having legislation for this purpose can be very well appreciated. Though all these principles which have been brought in by the Bill were already in existence, this bill goes on to codify them into an act (Basheer, 2008). Further amendments can be brought in considering the situations which arise. But for a star, this bill would be highly beneficial © 2018Joh Wey & Sans Lia Ered The Jounal of Wo Intec ope 12018) Vl 18, 90.6Protecting Trade Secros in india ‘Abnjeet Kumar and Ada Msrro Suggestions and Conclusion From the discussions, we can clearly deduce the fact that protection of Trade secrets is of primary importance. It not only motivates innovations, but also regulates the competition in the market. The company’s growth depends mainly on the trade secret protection, In fact a change in the regime would motivate foreign investment to a great extent. For the purpose of understanding what changes can be introduced, there is a need to understand alittle about what are the practices which are already prevalent in other regimes. If we talk about trade secret protection, then there would not be a etter example than that ofthe United States. Here they have an independent legislation, named Uniform Trade Secret Act (UTSA), which ‘wholly deals with the protection of trade secrets. The Act clearly defines the term “trade secret” thereby explaining its scope. It also includes components which are already in public domain, provided it is an “effective, successful and valuable integration of the public domain elements” (Rivendell Forest Prods Ltd. v Ga.-Pac. Corp., 1994) . Further on, when an action is brought in under this Act, the court takes all initiatives to maintain the secrecy of the proceedings so that the parties do not lose much due to the eourt hearings. According fo section 5 of the UTSA, ‘in an action under this [Act] a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orde rs in connection with discovery proceedings, holding in - camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.” ‘Then on, there is also the Economic Espionage Act of 1996 which again relates to the protection of trade secrets. This act mainly is for the purpose of criminalizing the misappropriation of the trade secrets. One of the primarily important components of this Act is that it requires that the knowledge should not be in the public domain or should generally be known to the public. ‘The US courts have also accepted the doctrine of inevitable disclosure. According to this doctrine, “trade secret misappropriation is inevitable if an employee with knowledge of a company's specialised trade secrets accepts an equivalent position with a competitor” (Chaba and Chhaba, 2014), ‘This doctrine basically explains the fact that if an ex-employee decides to work with the competitor of the company, then in order to do some good work, he would rely on the information ‘hich he already knows. This information is what the earlier company has given him, This would be 4 major trade seeret misappropriation, as when he was an employee in the former company, the information was disclosed to him in good faith and his intentions to join the competitor were not elear then (Quinto and Singer, 2012, p. 91). There have been many cases Wherein this doctrine has been put into practice. [Now as we have clearly seen herein, a sui generis system is very important to solve the issue of sorting cout the problems relating to trade secrets misappropriation. In India, the trade secrets are mostly regulated through contracts. However, there isa need to have a law’ which would be uniform, Itis essential that there should be a proper definition of “trade secrets” which should be brought in so that the scope ean be explained adequately. The amount of protection that is granted now is very limited. The NDAS and NCAS can protect trade secrets to a certain extent, however if we have a better and refined regime then it would greatly motivate further developments {©2018 Joho Wey & Sons Lt Tra Jou of lis tee Popeny 0181 V1, 986 33Abnieet Kumar and Ace Mishra Protecting Trade Secrets in India About the Authors Abhijeet Kumar, Advocate, Patna High Court, 1/23, Vasudha Bhawan, Indrapuri Rd. No. 1 Patna-800024, Bihar; e-mail: abhijeetkumar!2991@gmail.com Adrija Mishra, Advocate, Odisha High Court, QirNo, VI-C, 3/2, Unit-l, Bhubhneshwar-751009, Odisha; |: mishra.adrija@gmail.com Notes 1. Section 408 of Indian Penal Code, 1860: 408, “Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, com inal breach of | {rust in respect of that property, shall be punished with imprisonment of either description for aterm which may extend to seven years, and shall also be liable to fine.” 2. Section 415 of Indian Penat Code, 1860: 415, “Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit ithe were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ‘cheat’.” 3. Article 39.2 of Trade-Related Aspects of Intellectual Property Rights 39.2.“‘The Agreement does not require undisclosed information to be treated as a form of property, but it does require that a person lawfully in control of such information must have the possibility of preventing it from being disclosed to, acquired by, or used by others without his or her consent in a manner contrary to honest commercial practices. “Manner contrary to honest commercial practices” includes breach of contract, breach of confidence and inducement to breach, as well as the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices ‘were involved in the acquisition.” 4, Section 51 in the Copyright Act, 1957 51. When copyright inftinged—Copyright in a work shall be deemed to be infringed — (a) when any person, without a licence granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act— (i) does anything, the exclusive right to do whieh is by this Act conferred upon the owner of the copyright, oF Gi) permits for profit any place fo be used for the communication ofthe work to the public where such ‘communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright; or (ii) permits for profitany place tobe used for the communication ofthe work tothe public where such communication constitutes an inftingement of the copyright in the Work, unless he was not aware and had no reasonable ground for believing that such communication to the publi would be an infringement of copyright; or © 2018Joh Wey & Sans Lia 38 The Jounal of Wo Intec ope 12018) Vl 18, 90.6Protecting Trade Secros in india ‘Abnjeet Kumar and Ada Msrro (b) when any person— (8) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or ) distributes either for the purpose of trade orto such an extent as to affect prejudicially the owner of the copyright, or (ii) by way of trade exhibits in public, or (iv) imports 2[°**] into India, 2{°*"] into India,* any infringing copies of the work: 3 [Provided that nothing in sub-clause (iv) shall apply to the import of one copy of any work, for the private and. domestic use ofthe importer.] Explanation —For the purposes of this section, the reproduction of a literary, dramatic, musical or artistic work inthe form of a cinematograph film shall be deemed. to be an “infringing copy”. References American Express Bank Lid. v Ms. Priva Puri (2006) II LLJ $40(Del). Basheer,S. (2008) Making India Innovative: A New Indian Innovation Act? [Online| Spicy 1, Available at [Accessed on 22/10! 2014) De, (2010) Keeping Confidence: Putting in Place a Trade Secret Protection Program inan R&D Laband in a ‘Manufacturing Business [online] Ranbaxy. Available at: [Accessed on 16/10/2014) Department of Science and Technology (2008) National Innovation Bill 2008 [Online] Government of India ‘Available at: [Accessed on 20/10/2014}, Engeliiet, A. (2007) Legal protection of trade secrets and know-how [online] tus Meats. Available at [Accessed on October 2015} John Richard Brady and Ors v Chemical Process Equipments Pvt.Ltd. and Anr, AIR 1987 Delhi 372. Krishan Murugai v Superintendence Co. of India Pvt. Lid, 1980 AIR 1717, 1980 SCR (3) 1278, Krishna, SB. (2007) ‘Enforcement of Intellectual Property Rights in Inia’. Manypaura Intellectual Properts Reports, Volume 3 (2), 96 Krishna, S.B. (20076) ‘The Value of tntellectual Property’, Manypatra Inielleetual Property Reports, Volume 1, 29-30, ‘Lakshmikumaran, M. (2008) “Utility Models: Protection for Small Innovations", Journal of Indian Law Institue, ‘Volume 46 (2), 322-332. Lansing Linde Led v Kerr (1991) \ AILER 418. Lex Orbis (2008) 4 Probe On The Proposed Natlonal Innovation Act, 2008 [Online), Available at [Accessed ‘on 22/102014}, Mis Ambiance dia Pvt Lud. v Shri Naveen Jainand, 122(2005) DLT@21 {©2018 Joho Wey & Sons Lt Tra Jou of lis tee Popeny 0181 V1, 986 345Abnieet Kumar and Ace Mishra Protecting Trade Secrets in India (MS Gujarat Botling Co. Lid. & Ors. v The Coca Cola Co. & Ors., AIR 1995 SC 2372. Ministry of Law and Justice (1958) 13th Report of The Law Commission of India, MLI, Government of India New Delhi Naniwadekar, M. (20084) The innovation Bill 2008 and Trade Secrets: Part I (Online] Spicy IP. Available at ~<_hitp:/spicyip.com/20081OFinnovation-bill-2008-and-trade-seeretshiml> [Accessed on 20/10/2014] Naniwadekar, M. (2008) The innovation Bill 2008 and Trade Secrets: Part 2 (Online) Spicy IP. Available at - [Accessed on 22/10/2014] National Conference of Commissioners on Uniform State Laws (1985) Uniform Trade Seerets Act [online]. Available a [Accessed on October 2015) Niranjan Shankar Golakarl v Century Spinning and Manufacturing Co, Lid, 1967 AIR 1098, 1967 SCR (2). Nishit Desai Associates (2008) Draft National Innovation Act, 2008: Government of India’s new initiative to boost innovation (Online). Available at [Accessed on 22/10/2014] Pai, V.and Seetharaman, R. (2004) “Legal Protection of Trade Secrets’ Supreme Court Cases, Volume 1, 22-28, Pramod so Laxmikant Sisamkar and Uday Naravanrao Kirpekar v Garware Plastics and Polyester Ltd and An. 1986 (3) Bom.C R411 Puneet Industrial Controls Pvt, Lid. v Classic Electronics, (1997) Sup ARBLR 195 Delhi. Quinto, D.W. and Singer, SH, (2012) Trade Secrets-Law and Practice. 2nd Edition, Oxford University Press. Rivendell Forest Prods Lud. v Ga-Pae. Corp., 28 F.3d 1042 1046 (10th Cir. 1994), Roy, AG. (2006) “Protection of Intellectual Property in the form of Trade Secrets’, Journal of Intellectual Property Rights, Volume 11 (May issue), 192-200, Srivastava, K. (2008) Jndian Innovation Act: Trade Secrets and Confidentiality [Online] Frontline. Available at - [Accessed on 22/10/2014], Stim, Rand Fishman, C. Using NDAs as a part ofa Trade Secret Program [online]. Available at [Accessed on 15/10/2014], ‘Trade-Related Aspects of Intellectual Property Rights, 1995 ‘Verma, S.K. (2002) ‘Legal Protection of Trade Secrets and Confidential Information’, Journal of Indian Lav Insitute, Volume 44 (3), 336-353. ‘World Intellectual Property Orgunisation (2004) WIPO Intellectual Property Handbook: Fields of IP Protection [online]. WIPO, Geneva. Available at [Accessed on 20/10/2014). Zafar, M., Nomani, M. and Rahman, F. (2011) “Intellection of Trade Secret and Innovation Laws in India’ Journal of Inellectual Property Rights, Volume 16 (July), 341-350, © 2018Joh Wey & Sans Lia 346 The Jounal of Wo Intec ope 12018) Vl 18, 90.6