4th Year, B.A.LL.B (Hons.)
Tamil Nadu National Law University.
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
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
“ 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.
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
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)
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”.
“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
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
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
National Innovation Act, 2008
National IPR Policy, 2016
Trips Plus Agreement.
“When it comes to intellectual property rights, not
everything that glitters is gold”
Dr. Benjamin Mitra-kahn