3. Meaning
Trade = Competitive Advantage + Potential to Generate
Revenues
Secret = Confidential Information Known to Few, All
Pledged to Secrecy
Confidential Information = Business or
Technical
Business = Financial, Commercial or Negative Technical =
Scientific
4. Principles
1.Information
• Readily Unascertainable
• Unknown by Proper Means
• Generally known matters of common knowledge, library, public
database, journals, patent information, hardware designs and
software applications available in market
5. Principles
2. Independent Economic Value
• Determined by cost of development, benefits derived or May
be derived
3. Reasonable Efforts
•Security Measures, Agreements
6. Examples:
• Pricing Information
• Customer Lists
• Business methods
• Strategic plans
• Marketing plan
• Work product
Ideas
• Design
• Drawing
• Model
• Specification
• Surface data
• Notes
• Improvements
8. Misappropriation
Conduct which results in obtaining Tradesecret
Information by Improper Means
Improper Means
• Theft
• Bribery
• Espionae
• Misrepresentation
• Breach of Contract
• Inducement to breach a duty
• Network attacks
9. Protection of Trade Secret
Identification of Information as TradeSecret
Determinants:
• Value of Information to Company
• Who Should Know
• Value and Access to Competitors (Ease to Copy, Duplicate etc.)
• Measures Taken
10. Precaution
s:
Written Protection Policies –Clarity, Quantum of
Disclosure, Whom to Disclose.
Information Security –Control ed Online Transactions, Password
Protection, USB Ports, Intranet, Anti Virus, Firewal s.
Physical Security - Record Keeping, Docketing, Documentation,
Marking, Paper Shredding, Logs, Visitor’s Passes, Clean Desk
Policy.
Human Resources - Entrance and Exit Interviews, Cur ent
Employees, Agreements, Periodic Training and Audits, Restrict
Access
Enforcement –Watch Compliances, Prosecute Violators
Agreements –Non Disclosure Agreement, Confidentiality
Agreements
12. Business Strategies
1. Patents and Trade Secrets
Patents Trade secrets
Registration Yes No
Availability Time Consuming Immedi
ate
Longevity 20 Years No Limit
Public Disclosure Yes No
Protection Exclusive Limited
Enforcement Powerful Tool Difficult
13. Choice between Patents and Trade Secrets on
basis of Legal and Business Perspective
• Keep Information initial y as Secret
• If Patentable, disclose only what enables person skil ed in art
to practice the invention
• May keep confidential tilPublication Date
14. Business Strategies
2. Sale
Transfer by way of sale of entire business Only
Partial sale not possible
3. Licensing
In combination with Patent and Software Licenses
Clear, Explicit and Controlled Disclosure
15. Enforcement
Statutes:
No Trade Secret Law in India
Contracts:
Confidential arrangements between parties through Non Disclosure
Agreements and other Confidential Agreements
Specific Relief:
Claim specific performance or damages
Arbitration and Conciliation:
Most of the dispute settlement prescribed in contracts, agreements or
otherwise dealt through arbitration
16. Copyrights
Blatant or substantial copying
• Torts
•Misappropriation, Theft, Espionage, Unfair Competition
• Criminal Laws
• Indian Penal Code, Code of Criminal Procedure
• Information Technology Laws
•Hacking, Tampering with Computer, Computer Source
or Network
17. Court Decisions
1. Mundipharma v Wockhardt
License Agreement to sell pharmaceutical preparations with discretion to
adopt such packaging design as it thinks proper; contains
copyrighted content which is confidentialinformation
Pharmaceutical Preparationand Product became public information during
cur ency of Agreement
Dispute Arose
Section 27 of Contract Act invoked to restrict rights after termination of
license
No actual or potential damages showed
18. Held: S. 27’s exception to restrain other’s trade due to loss of 1st party’s
goodwill cannot be considered here.
Information already Public, no goodwil loss
*Goodwill Loss –damages should be proved.
19. Trade Secret Case between Competitors Alphamed incorporated by ex
employees of Arriva
Arriva used Unfair Competitive practices to destroy Alphamed’s business
Arriva stole Alphamed’s Confidential documents and other Trade Secrets
by appointing secret detectives and used them for their business
advantage
Alphamed couldn’t provide actual or potential damages
Held: Trade secret theft by unfair means is unfair
competition.
No remedy may be provided because of lack
of proof on damages by Alphamed
*Actual orpotential damages proof necessary
2. Alphamed v Arriva
20. Employer-Employee Relationship
Memorandum of Understanding signed provides Non Competition Clauses
Confidential Information not defined in the Memorandum Employee resigns
to join another company
Employerfiles to get injunction on employee’s joining
Held: No confidential information defined
Proper relief is not asked, therefore suit dismissed.
*Confidential Information should be explicitly defined, else itis
unfair to stop employee from joining competitor.
3. VPS Global v Suprit Roy
