How the Trade Secret is protected in India

A Trade Secret is a practice to keep secret the information about the practice, process, design and formulas from which an establishment can get financial benefits. The unauthorized use of the trade secret is a legal offence. The trade secret of the establishment is protected by the law of the country. There are some differences between the patent and trade secret protection. As for example, trade secret can be protected for an unlimited period, in contrary to the limited period of patent protection. Article 39 of the “Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)”has provided a general guideline of trade secret protection.

The main features of the guidelines are:-

Undisclosed information which has a commercial value should be protected from unfair practices. The unfair practices include the illegal acquisition of manufacturing process, technical data and business strategy for commercial gain.
When a secret data is submitted for the approval, it should be protected from the leakage .

Trade secret is a self-administered process. There is no procedural formality of protecting Trade secrets. Manufacturers prefer trade secret protection than patent due to its hustle-free formalities. Individual country has made the trade secret law following the guidelines of “TRIPS Agreement”.

There are no specific laws of trade secrets in India. In India, the concept of trade secret protection is not so popular like patent, copyrights and trademarks. Therefore, the concept of trade secret has not been developed. But, in the digital age, the competition has been stiff and the business has to be more vigilant to protect the business secrecy from the competitors. Unlike India, the contractual nations of “TRIPS Agreement” have enacted law for protecting the trade secret according to the guidelines of “TRIPS Agreement”. In India, the only statutory provision is section 27 of Indian Contract Act to protect the trade secret. The current process is not enough for the protection of trade secrets. Therefore, Indian manufacturers and the producers felt the need of another convenient tool. In this context, they appealed the Central Government to enact a new law to protect the trade secret in the line of “TRIPS Agreement”.

In the meantime, Department of Science and Technology (DST) has introduced the National Innovation Act, 2008 (the Draft Act) drafted by Federation of Indian Chambers of Commerce and the Industry (FICCI). The chapter VI of the draft proposed a guideline of the trade secret act. However, a section of experts have alerted the Government that the introduction of the trade secret law is okay, but if the proper care is not taken in promulgation of the law, it would open the floodgate of litigations. The Government wants a comprehensive analysis on the impact of the laws. They have sought the opinions of the experts. Whatever may be the consequence, the Government has to enact the law within a short period.

For more information on copyright, patent and intellectual property rights, please contact: Lex Protector

By Aurobinda Panda: By Aurobinda Panda

Founder & C.E.O of Lex Protector International Law Office

Ph: +91-9658577326

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