This document discusses trade secret protection in India. It begins by defining trade secrets as confidential business or technical information with competitive advantage and potential for revenue generation. Trade secrets must be not readily ascertainable, acquired through proper means, and subject to reasonable security efforts. The document outlines how trade secrets can be acquired and protected, including through confidentiality agreements and identification of confidential information. It also discusses enforcement of trade secret protection through statutes, contracts, arbitration, and court decisions in India which have addressed issues like proving damages and explicitly defining confidential information.

1. Trade Secret Protection In India
By,
Ms Vintee Mishra
Brain League IP Services
Now BananaIP
Copyright Brain league IP Services Pvt. Ltd. Now BananaIP
2008

2. Overview
Meaning
Acquisition of Information
Protection of Trade Secret
Confidentiality Agreements
Business strategies
Enforcement

3. Meaning
Basics:
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 orNegative
Technical = Scientific

4. Principles:
1.Information
Readily Unascertainable
Unknown by ProperMeans
Generally Known
Matters of common knowledge, library, public
database,
journals, patent information, hardware designs and
software applications available in market

5. 2. Independent Economic Value
Determined by cost of development, benefits
derived orMay 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.

7. Acquisition of Information
ProperMeans
Reverse Engineering
Independent Creation
Public Literature
Observance
License

8. Misappropriation
Conduct which results in obtaining Trade secret
Information by ImproperMeans
ImproperMeans
Theft
Bribery
Espionage
Misrepresentation
Breach of Contract
Inducement to breach a duty
Networkattacks

9. Protection of Trade Secret
Identification of Information as Trade Secret
Determinants:
Value of Information to Company
Who Should Know
Value and Access to Competitors (Ease to Copy, Duplicate etc.)
Measures Taken

10. Precautions:
Written Protection Policies – Clarity, Quantumof
Disclosure, Whomto
Disclose.
Information Security – Controlled Online Transactions, Password
Protection, USBPorts, Intranet, Anti Virus,
Firewalls.
Physical Security - Record Keeping, Docketing, Documentation,
Marking, PaperShredding, Logs, Visitor’s
Passes, Clean DeskPolicy.
Human Resources - Entrance and Exit Interviews, Current
Employees, Agreements, Periodic Training
and Audits, Restrict Access
Enforcement – Watch Compliances, Prosecute Violators
Agreements – Non Disclosure Agreement, Confidentiality
Agreements

11. Confidentiality Agreements
Employer– Employee
Vendor
Supplier
Contractors, Sub Contractors
Consultants
Important Provisions
Define Confidential Information – Scope
Clarify Exclusions
Definite Obligations
Time Limit
Jurisdiction

12. Business Strategies
1. Patents and Trade Secrets
Patents Trade secrets
Registration Yes No
Availability Time Consuming Immediate
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 initially as Secret
If Patentable, disclose only what
enables person skilled in art to practice
the invention
May keep confidential till Publication
Date

14. 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 confidential information
Pharmaceutical Preparation and Product
became public information during
currency of Agreement
Dispute Arose
Section 27 of Contract Act invoked to
restrict rights aftertermination of
license
No actual orpotential 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 goodwill loss
* Goodwill Loss – damages should be proved.

19. Trade Secret Case between Competitors
Alphamed incorporated by ex employees of Arriva
Arriva used UnfairCompetitive practices to destroy
Alphamed’s business
Arriva stole Alphamed’s Confidential documents and
otherTrade Secrets by appointing secret
detectives and used themfortheirbusiness
advantage
Alphamed couldn’t provide actual orpotential damages
Held: Trade secret theft by unfairmeans 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
Memorandumof Understanding signed provides Non
Competition Clauses
Confidential Information not defined in the Memorandum
Employee resigns to join anothercompany
Employerfiles to get injunction on employee’s joining
Held: No confidential information defined
Properrelief is not asked, therefore suit dismissed.
* Confidential Information should be explicitly defined, else it is
unfairto stop employee fromjoining competitor.
3. VPS Global v Suprit Roy

21. Remedies
Injunction
Damages
Search and Cease Order
Precautionary Impoundment

22. ThankYou