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Trade Secret Protection In India

By, Ms Vintee Mishra Brain League IP Services

Copyright Brain league IP Services Pvt. Ltd. 2008

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

Meaning
Basics: Trade = Competitive Advantage !enerate "evenues Potential to Secret = Confidential Information #no$n to %e$& All Pledged to Secrecy Confidential Information = Business or Tec'nical Business = %inancial& Commercial or (egative Tec'nical = Scientific

Principles:

)*Information "eadily +nascertaina,le +n-no$n ,y Proper Means !enerally #no$n


Matters of common knowledge, library, public database, journals, patent information, hardware designs and software applications available in market

.* Independent Economic /alue


0etermined ,y cost of development& ,enefits derived or May ,e derived

1* "easona,le Efforts
Security Measures& Agreements

E2amples:
Pricing Information, Customer Lists, Business methods, Strategic plans, Marketing plan Work product Ideas, Design, Drawing, Model, Specification, Surface data, Notes, Impro ements!

Acquisition of Information
Proper Means
"everse Engineering Independent Creation Pu,lic 3iterature 4,servance 3icense

Misappropriation
Conduct $'ic' results in o,taining Trade secret Information ,y Improper Means

Improper Means
T'eft Bri,ery Espionage Misrepresentation Breac' of Contract Inducement to ,reac' a duty (et$or- attac-s

Protection of Trade Secret


Identification of Information as Trade Secret
0eterminants:
/alue of Information to Company 5'o S'ould #no$ /alue and Access to Competitors 6Ease to Copy& 0uplicate etc*7 Measures Ta-en

Precautions:
5ritten Protection Policies 8 Clarity& 9uantum of 0isclosure& 5'om to 0isclose* Information Security 8 Controlled 4nline Transactions& Pass$ord Protection& +SB Ports& Intranet& Anti /irus& %ire$alls* P'ysical Security : "ecord #eeping& 0oc-eting& 0ocumentation& Mar-ing& Paper S'redding& 3ogs& /isitor;s Passes& Clean 0es- Policy* <uman "esources : Entrance and E2it Intervie$s& Current Employees& Agreements& Periodic Training and Audits& "estrict Access Enforcement 8 5atc' Compliances& Prosecute /iolators Agreements 8 (on 0isclosure Agreement& Confidentiality Agreements

Confidentiality Agreements
Employer 8 Employee /endor Supplier Contractors& Su, Contractors Consultants Important Provisions
0efine Confidential Information 8 Scope Clarify E2clusions 0efinite 4,ligations Time 3imit =urisdiction

Business Strategies
)* Patents and Trade Secrets
Patents egistration #vaila$ility Longevity Pu$lic &isclosure Protection 'n)orce%ent !es Ti%e Consu%ing 20 !ears !es '(clusive Power)ul Tool Trade secrets "o I%%ediate "o Li%it "o Li%ited &i))icult

C'oice ,et$een Patents and Trade Secrets on ,asis of 3egal and Business Perspective #eep Information initially as Secret If Patenta,le& disclose only $'at ena,les person s-illed in art to practice t'e invention May -eep confidential till Pu,lication 0ate

2. Sale
Transfer by way of sale of entire business Only artial sale not possible

!. "icensing
#n combination with atent and Software "icenses $lear, %&plicit and $ontrolled 'isclosure

'n)orce%ent

Statutes(
)o Trade Secret "aw in #ndia

$ontracts
$onfidential arrangements between parties through )on 'isclosure *greements and other $onfidential *greements

Specific +elief
$laim specific performance or damages

*rbitration and $onciliation


Most of the dispute settlement prescribed in contracts, agreements or otherwise dealt through arbitration

$opyrights
,latant or substantial copying

Torts
Misappropriation, Theft, %spionage, -nfair $ompetition

$riminal "aws
#ndian enal $ode, $ode of $riminal rocedure

#nformation Technology "aws


.acking, Tampering with $omputer, $omputer Source or )etwork

Court 0ecisions )* Mundip'arma v 5oc-'ardt


3icense Agreement to sell p'armaceutical preparations $it' discretion to adopt suc' pac-aging design as it t'in-s proper> contains copyrig'ted content $'ic' is confidential information P'armaceutical Preparation and Product ,ecame pu,lic information during currency of Agreement 0ispute Arose Section .? of Contract Act invo-ed to restrict rig'ts after termination of license (o actual or potential damages s'o$ed

<eld: S* .?;s e2ception to restrain ot'er;s trade due to loss of )st party;s good$ill cannot ,e considered 'ere* Information already Pu,lic& no good$ill loss @!ood$ill 3oss 8 damages s'ould ,e proved*

2. *lphamed v *rriva

Trade Secret Case ,et$een Competitors Alp'amed incorporated ,y e2 employees of Arriva Arriva used +nfair Competitive practices to destroy

Alp'amed;s ,usiness Arriva stole Alp'amed;s Confidential documents and ot'er Trade Secrets ,y appointing secret detectives and used t'em for t'eir ,usiness advantage Alp'amed couldn;t provide actual or potential damages <eld: Trade secret t'eft ,y unfair means is unfair competition* (o remedy may ,e provided ,ecause of lacof proof on damages ,y Alp'amed

!. / S 0lobal v Suprit +oy Employer:Employee "elations'ip


Memorandum of +nderstanding signed provides (on Competition Clauses Confidential Information not defined in t'e Memorandum Employee resigns to Aoin anot'er company Employer files to get inAunction on employee;s Aoining

<eld:

(o confidential information defined

Proper relief is not as-ed& t'erefore suit dismissed* @Confidential Information s'ould ,e e2plicitly defined& else it is unfair to stop employee from Aoining competitor*

+emedies
#njunction 'amages Search and $ease Order recautionary #mpoundment

T'an- Bou