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Protecting Trade Secrets in India

How to protect TRADE SECRETS in India?

The primary goal of “Make in India” initiative was to make India a “Global Manufacturing Hub”. With both multinational companies and domestic companies manufacturing their products within the country, the significance of exports and the manufacturing sector in India has increased considerably. Several measures have been taken to ensure continuous and unending improvement of the Indian IP ecosystem in the country due to the need to extend such to exports for its proper commercialization.

Just as other Intellectual Property Rights, Trade Secrets are extremely valuable and sometimes even critical for a company’s growth and survival. Trade secret is a formula, process, device, method, technique or other business information having commercial value. This information is kept confidential and exclusive. Reasonable steps have been taken to maintain its secrecy to get competitive advantage over the competitors.   

For example, Trade secrets like Coca-Cola’s formula for its aerated drinks have been preserved for many decades and is not in the public domain.

India has no specific law for the protection of trade secrets. But, Article 39 of Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement to which India is a signatory provides for the specific provision for the protection of undisclosed information.

Article 39 of the TRIPS Agreement states that:

  1. In the course of ensuring effective protection against unfair competition as provided in Article 10b is of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.
  2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices (10) so long as such information:                                                                                                                     (a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question          (b) has commercial value because it is secret; and                                                        (c)

    has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

  3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

     Unlike Patents and Copyrights which can be protected for about 20 years and 100 years respectively, trade secrets can potentially last much longer. A trade secret continues to remain a trade secret as long as any other person does not independently discover the information.Due to the absence of law for the protection of trade secrets, Indian courts have approached trade secrets protection on the basis of principles of equity, action of breach of confidence and contractual obligations.

    In India, a person can be contractually bound to not disclose any information which is told to him in confidence and if the person discloses the information, he/she can be sued for violating the Non-Disclosure Agreement.

    Companies can include a non-disclosure agreement in their employment contracts which prevents the employees to disclose any sensitive and confidential information regarding the company during their term of employment with the company or afterwards so that the secret is not spilled out. In cases where the trade secret is in a physical form like blueprints, files etc. a strict Security System should be in place so that this confidential information remains confidential.

    If your business relies on sensitive information that you would consider to be a trade secret, we encourage you to consult with a legal practitioner for advice on maximizing its protection.

    Patents | Intellectual Property India

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