Developing Sui-Generis System For The Protection of Trade Secret in India: An Analytical Study

DEVELOPING SUI-GENERIS SYSTEM FOR
THE PROTECTION OF TRADE SECRET IN

INDIA: AN ANALYTICAL STUDY
VEENA.T.N
ASSISTANT PROFESSOR,
BMS COLLEGE OF LAW
BENGALURU-19
“Stealing things is everybody's problem. We [Apple Inc.] own a
lot of intellectual property, and we don't like when people steal it.
So, people are stealing stuff and we're optimists. We believe that
80 percent of the people stealing stuff don't want to be; there's
just no legal alternative.”
-Steve Jobs, Founder of Apple Inc.
INTRODUCTION:
• India has made prolific growth in the intellectual property field, but it lacks in developing
trade secrets legislation.
• In 2008, the country drafted the National Innovation Act to protect Trade Secrets and
confidential information, but it did not pass by either House of Parliament.
• The Indian legislature adopts several ways for the protection of Trade Secrets and
confidential information.
• The Judiciary mainly relies on the Law of Torts, Sec-27 of the Indian Contract Act, and
equitable doctrine like patents Act and Copyrights Act to protect trade secrets.
The Indian government has declared the years from 2010 to 2020 as the "Decade of
Innovations." The main aim of "this declaration is to develop an innovation eco-system in
the country to stimulate innovations and produce solutions" for society, particularly
concerning healthcare, energy, urban infrastructure, water, and transportation.
India has recognized the most popular forms of Intellectual property, including Copyright,
Trademarks, Patents, Geographical Indications, but still a new type of intellectual property
protected internationally; lack of protection in India, i.e., Trade Secrets.
The TRIPS Agreement was the first international agreement to protect trade secrets
expressly. The approach laid out in the TRIPS agreement is based on the notion that
protection against unfair competition should include the security of undisclosed information.
According to Uniform Trade Secrets Act,1970 and “information, including a formula,
pattern, compilation, program device, method, technique or process, that:
• Derives independent economic value, actual or potential, from not being known to, and
not being readily ascertainable by proper means by, another person who can obtain
economic value from its disclosure or use, and
• Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
In American Express Bank Ltd. v. Ms. Priya Puri, The Delhi High court held that an
employee's rights to seek and search for better employment are not curbed by an injunction
even though she had confidential data. Therefore, held to be in favor of the defendant. Thus,
the court differentiated between service trade secrets and routine day-to-day affairs of
employers, which were in the knowledge of many and were commonly known to others that
could not be called trade secrets. Trade secrets could be a formula, technical know-how, or a
peculiar mode or method of business adopted by an employer, which was unknown to others.
Intellectual property or Sui-generis.
The term property has always been a debatable topic under jurisprudence. India has enacted
the Copyrights Act,1957, which provides complete and comprehensive copyright protection
in India. Further, it has enacted Trademarks Act,1999, which repealed the Trade Merchandise
Marks Act.1958. The Patents Act, 1970 extends protection to patents in India. But, there is
no specific law for trade secret protection in India.
Trade secrets as property.

In Dwarakadas Srinivas V. The Sholapur Spinning & Weaving Co Ltd, the court held that
“the word ‘property’ should be construed in the widest sense as connoting a bundle of rights
exercisable, by the owner in respect thereof and embracing within the purview both
corporeal and incorporeal rights. The word ‘property’ is not defined in the constitution, and
there is no good reason to restrict its meaning”.

In Entertainment Network (India) Ltd Vs. Super Cassette Industries Ltd, the court stated
that while analyzing the ownership of property, it should always be interpreted under Art 19(1)
(g) r/w 300A, and Hon’ble SC also considered that copyright falls under the meaning of the
word property of Art 300A and by following the interpretation done under the following
circumstance, we can term trade secrets and confidential information as property.
As Marks Lemley notes, the law of trades originated in the interconnection of many common
law doctrines: breach of confidence, breach of confidentiality, common law misappropriation,
unfair competition, unjust enrichment, and trespass.
The basic idea of property is to exclude other forms of enjoyment and restrict access to other
than the owner. It limits the use and disclosure of information possessed by some others. Trade
secret holders got the right to protect property, not because they own it. Still, they invented it
like copyright and patent for the production of their business.
Trade secrets should be protected as IPs like patents and copyright, which focus on
innovation, changes, and the development of valuable information, etc.
Conclusion
Due to lack of protection, many international companies show no interest in investing in

Indian companies, which directly affects the country's economy. Protection of trade secrets as
property has acquired great importance in the present scenario due to the emergence of
different circumstances where it is preferred over patent protection.
Therefore, a new trade secret legislation is the only way to ensure robust and effective IPR
protection which might successively open up new and profitable avenues of business
scenarios in India.

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DEVELOPING SUI-GENERIS SYSTEM FOR

THE PROTECTION OF TRADE SECRET IN

Trade secrets as property.

Due to lack of protection, many international companies show no interest in investing in

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