TRADE SECRETS &

TRADE MARKS
Prashant sunagar
Asst professor
MSRIT
Bangalore

Trade Secrets Under TRIPS

The trade-related aspects of intellectual
property rights - TRIPs Agreement divided
intellectual property rights into the
following seven heads 1. Patents,
2. Trademarks,
3. Copyrights,
4. Industrial designs,
5. Layout designs of integrated circuits,
6. Undisclosed information (trade secrets),
and
7. Geographical indications.
Under TRIPs Agreement 'trade secrets' are

Present scenario of trade secrets

In the present scenario of aggressive competition,

industrialization and liberalization every corporate
house has certain information with regard to
technological know-how, idea, business methods
etc. over which it has exclusive possession that it
wants to protect. These are known as trade secret
For instance, the formula for making coke is
considered to be the most well guarded trade
secret in the world.

Formulas

A glass of Coca-Cola

The Coca-Cola formula is The Coca-Cola Company's secret recipe

Coca-Cola. As a publicity, marketing strategy and intellectual proper
protection strategy started by Robert W. Woodruff, the company pre
the formula as a closely held trade secret known only to a few empl
mostly executives. the formula for making coke is considered to be
the most well guarded trade secret in the world.

What is a Trade Secret?

1.

2.

3.

A trade secret is any information that:

provides its owner with a competitive
advantage because it is not known to
others;
It is the subject of efforts that are
reasonable under the circumstances to
maintain itssecrecy.
has commercial value because it is
secret,

Examples of Trade Secrets

Source code

Engineering Drawings

PCb layout

Automotive

Mechanical

Architectural

Manufacturing processes

Pcb assembly.proc.

Girder Mfg.proc. System Mfg.proc.

Algorithms

Parameterized and Exact

Algorithms for Cluster Editing

Listings and manuals

Forensic manuals

Franchise manuals

Marketing and business strategies

Marketing strategies

business strategies

Media Marketing strategies

Kentucky Fried Chicken

Kentucky Fried Chicken's original "11 herbs and spices" recipe,

handwritten by Col. Sanders 68 years ago, was transferred earlier
this month from a Louisville safe to an undisclosed location. The
yellowing parchment is now protected by motion sensors and
laser beams, said KFC spokeswoman Laurie Schalow.

Maintenance of Trade Secret

A trade secret must be not generally known,

and its owner must take reasonable steps to
maintain its secrecy
Reasonable steps - examples:
Non-disclosure agreements
Employees, contractors, suppliers,
licensees, etc.
Placing "confidential" legends on key
documents
Restricting access to only those who need to
know

Secret vs Trade secret

A trade secret must be a secret
A trade secret must have value

How to Protect Your Secrets

Be aware of company insiders, former

employees, and competitors milling your
hallways
Keep your employees informed of the value of
discretion
Have them sign and agree to a Policy
Statement
Create key management teams who oversee the
compliance with security
Train employees via orientation
Maintain an auditing and reporting system
Limit Discretion of key secrets

Uniform Trade Secret Act

(UTSA).

United States of America was the first

country to enact a statute dealing with
trade secrets. The Act is known as the
Uniform Trade Secret Act (UTSA). The
UTSA sought to provide some consistency
in trade secret law that, until recently, was
protected only by state laws. Most
European and developed countries have
based their statutes on the UTSA.

Position In India

India being a signatory of the TRIPs

Agreement India is under an obligation to
bring its intellectual property laws in
conformity with international standards.
India has achieved this to a large extent by
enacting new and amending existing
legislations on intellectual property laws.
However, unlike the US and other
developed countries India has no
legislation dealing with trade secrets.

Position In India

In India protection of trade secrets is

Common Law based. However, section 27
of the Indian Contract Act provides some
sort of limited remedy, it bars any person
from disclosing any information which he
acquires as a result of a contract. There
are scores of reasons for the absence of
any statute dealing with trade secrets.

Potential drawback of Trade Secret

One issue involving trade secrets:

the competition authorities have decided
that protecting software by trade secret
protection is a lesser form of protection.
The theory, anything worth protecting
should be patented.

Conclusion: Prevention is better than cure

As businesses are growing out of their local

moulds and going global, effective trade secret
protection is becoming a necessity. Though
there is no enactment in India that affords
protection to trade secrets, businesses can use
the tools mentioned above to safeguard these
trade secrets. Businesses must remember that
adequate and effective creation, protection, use
and management of trade secrets are crucial
factors in determining their success.

TRADEMARKS

What is a trademark?
A trademark is a distinctive sign,which
identifies certain goods or services as those
produced or provided by a specific person
or enterprise.
The system helps consumers identify
and purchase a product or service
because its nature and quality, indicated
by its unique trademark, meets their needs.

What does a trademark do?

A trademark provides protection to the
owner of the mark by ensuring the
exclusive right to use it to identify goods
or services, or to authorize another to use
it in return for payment.

What kinds of trademarks can be

registered?
The possibilities are almost limitless.
Trademarks may be one or a combination
of words, letters, and numerals.

TRADEMARK LAW IN INDIA

Trade Mark Act, 1999
TM: a visual symbol (word, letter, numeral,
name, signature, device, label, symbol)
identifying goods or services of one person
from those of others, and capable of
graphic representation
Includes shape of goods, packaging,
combination of colours

Well known TM: If consumers seeing it

applied on some goods relate it to the same
mark applied on some other goods.
Collective Mark: Owned by an Association
of Persons, who do not make a partnership
(Indian Partnership Act, 1932)
Certification Mark: Proprietor certifies that
goods conform to certain characteristics:
quality, ingredients, etc. e.g. Agmark, ISI
mark .

Use of Sign
Used

on goods, means appearance of

sign not only on goods but containers &
wrappers too.

Used

in connection with the marketing

means
appearance
of
sign
in
advertisements and display windows.

Registration of TM

Controller General of Patents, Designs and

Trademarks is also Registrar of Trademarks
Registry H.O. Bombay
Branch offices (4) Kolkata, Chennai, New Delhi,
Ahmedabad
Register of TM contains all record of registered
TMs, with names, addresses and description of
proprietors, users, conditions, assignments,
transmissions and limitations.
A digital library of 1,50,000 TMs and 1250 TM
journals on CD-ROM

REGISTRABILITY OF TM

A TM should satisfy at least one of the

following characteristics for registration.
Be a name of a company/individual
represented in a special manner;
Be the signature of the applicant;
Be one or more invented words;
Be one or more words having no direct
reference to the characters or quality of
the goods, barring certain exceptions
A part of TM can be registered separately.

ABSOLUTE GROUNDS FOR

REFUSAL

Not being distinctive;

Consisting exclusively of marks and
indications to designate kind, quality,
quantity, intended purpose, values,
geographical origin etc.;
Mark being identical with or deceptively
similar to a registered TM in respect of
same goods or services.

A Mark whose use would be contrary to any

law;
A Mark containing scandalous/obscene
matter; or likely to hurt religious
susceptibility of any class/section of the
people;
A mark if it is prohibited under the
Emblems and Names (Prevention of
Improper Use) Act, 1950;

A trademark, which consists of a national

flag, or contains a national flag, cannot be
registered, according to Art 3, 1. h. of the
Directive.
The following shall not be registered or if
registered shall be liable to be declared
invalid:
Trade marks which have not been authorized
by the competent authorities and are to be
refused or invalidated pursuant to Article 6ter
of the Paris Convention for the Protection of
Industrial Property, hereinafter referred to as
the 'Paris Convention'.

When is a flag a ground for refusal?

A mark if it consists exclusively of the

shape of goods which
results
from the nature of goods
themselves;
is necessary to obtain a technical result;
which gives substantial value to the
goods (difficult to interpret).

RELATIVE GROUNDS FOR

REFUSAL

Except in rare circumstances of honest,

concurrent use, a mark shall not be
registered, if
it has identity with an earlier TM and
similarity of goods or services; or
it has similarity to an earlier TM and
the identity or similarity of the goods or
services; and
such
identity
or
similarity is likely to cause confusion.

A TM has similarity/identity with an earlier

well known TM even for dissimilar
goods/services, if its use would take unfair
advantage of, or be detrimental to, the
distinctive character or repute of the earlier
TM.
If its use is prevented by any law,
particularly the law of passing off,
protecting an unregistered TM.

PROHIBITION FROM
REGISTRATION

No word which is
the commonly used and accepted name of
any single chemical element or
compound, or
declared by the WHO and notified by the
Registrar as an international nonproprietary name, (or word deceptively
similar to it),
shall be registered as TM.

Honest Concurrent Use

Registrar may permit registration of

identical or similar TMs by more than one
proprietor in special circumstances.
If a TM falsely suggests a connection with a
living person (or a person, who has died
within 20 years preceding the application),
Registrar may require written consent of the
living person or the legal representative of
the deceased.

ADVERTISEMENT, OPPOSITION

After acceptance, the application is advertised

in the Trademarks Journal.
Any person may give notice of opposition to
Registrar within 3 months of publication the
period extendable by 1 month.

Registrar serves a copy of the notice to the

applicant, who files a counter-statement within
2 months, which is then sent to the opponent.
Registrar considers evidence, hears the parties
and decides suitably. Any conditions or
limitations could be prescribed on registration.

REGISTRATION

TM is then registered and Registrar issues a

certificate of registration to the application
with the seal of the Registry.
Registration valid for 10 years, may be
renewed indefinitely, for 10 years each time.
Failure to renew registration leads to removal
of TM from the Register; it could be restored
by an application filed within one year.

EFFECT OF REGISTRATION

No proceedings for infringement of an

unregistered TM can be instituted.

Action can be taken for passing off

goods/services

Registration gives exclusive right to the

proprietor to the use of the registered TM in
relation to the goods/services regd., subject to
any conditions/limitations of registration.

Where two or more persons are registered

proprietors of identical, or closely resembling
TMs, none of them have the exclusive right to
use the TM. vis--vis each other, but each of
them has the exclusive right against others,
excluding the registered users.

Registration is prima facie proof of validity in

all legal proceedings.

INFRINGEMENT OF TM
A registered TM is infringed by a person
who, without the permission of the
proprietor,

Uses in the course of trade an identical or a

deceptively similar TM in relation to goods
or services for which the TM is registered;
or

Uses a mark which because of

its identity with the regd. TM and the

identity or similarity of the goods/services
covered by it; or

its similarity to the regd. TM and the

identity or similarity of the goods/services;

Is likely to cause confusion on the part of the

public.

Uses a mark which is identical with or

similar to the regd. TM and is used in
relation to dissimilar goods/services and
the regd. TM has a reputation in India and
the use of the mark takes unfair advantage
of, or is detrimental to, the distinctive
character or repute of the regd. TM

Infringement [I-IS, S-IS, IS-D (WT)]

TM

Goods/services

Status

Identical

Yes

Similar

Yes

Identical

Yes

Similar

Yes

Identical

Dissimilar

Yes

Similar

Dissimilar

Yes

Identical
Similar
(only for WellKnown TM)

TM-21

Exemptions

Use of a mark in accordance with honest

practices, and not such as to take unfair advantage
of, or harm the distinctive character/repute of the
TM, is not infringement.

The following are not infringement:

use in relation to goods/services to indicate

kind, quality, quantity etc. of the
goods/services;

use in a manner outside the scope of

registration;

use in relation to goods/services where the

owner had once applied the mark and had not
subsequently removed it or impliedly
consented to its use;

use in relation to parts/accessories of other

goods, where such use is reasonably
necessary and not likely to deceive as to the
origin.

The proprietor of a registered TM can not

interfere
with
the
use
of
any
identical/similar TM, if a person has been
using this mark from an earlier date.

Trademarks - A Cautionary Tale

In 1998, sales of the luxury car brand Rolls

Royce were declining and its owner, Vickers
Corporation, put the Rolls Royce Ltd. division
up for sale.
BMW had long been making parts for the Rolls,
and offered Vickers $575 million dollars for the
company.
However, Volkswagen was also keen to enter
the luxury car market and pushed BMW into a
bidding war. Volkswagen won in the end, paying
$795 million for the company.
Unfortunately, Volkswagen was in such a hurry
to beat its German rival, that it overlooked the
essential question of what exactly it would get
for its $795 million.

BMW kept its eye on the ball, however. It

knew that the Rolls Royce trademarks
were in fact owned by Rolls-Royce PLC
the aircraft company, not Rolls Royce
Ltd the motor car company. BMW
purchased the trademarks from the aircraft
company for a mere $65 million dollars.

Volkswagen then belatedly discovered that

although they owned the rights to build the
worlds most elegant luxury car, they could not
use the grill, the hood ornament, or the
legendary name! The point is that while
intellectual property (IP) can be critical to the
success of many deals, IP due
diligence often receives scant
attention and this omission
can be very costly.

Infringement of Trademark

The test laid down by the Supreme

court is a
person of average
intelligence with imperfect memory
Amritdhara case AIR 1963 SC 449.
This test is followed by the Supreme
Court and by various High Courts all
over India.

CASTROL VS PENTAGON
IS THERE ARE
INFRINGEMENT ?

NYLE VS KAMILL- IS THERE

AN INFRINGEMENT ?

SABENA VS SUBEENA
IS THERE AN INFRINGEMENT ?

- IS THERE AN INFRINGEMENT
?

Marks different Get up same

CASTROL VS PENTAGON

Where the marks are different, but the colour

scheme, get up and layout are identical, injunction
has been granted in a suit for passing off.

Castrol Vs. Pentagon Lubricants C.S. No. 327

of 1999 Order of Mr. Justice A. Ramamurthi
dated 22.12.1999. The Learned Judge observed
that in view of the colour scheme, packing being
identical, an ordinary person would assume that
the defendants goods also emanate from Castrol.

NYLE VS KAMILL

Beauty Cosmetics Vs.Kamil cosmetics

C.S. No. 415 of 1998 Mr. Justice Akbar
Basha Khadiri
by an order dated 25th June 1998 granted
an injunction restraining Kamil Cosmetics
from selling Shampoo with a label similar
to Nyle Shampoo label although the marks
Nyle and Kamil are completely different

Marks similar, getup similar

Scientific Compounds Vs. Hanuman

Cottage (2001) 1 CTMR 403

Mr. Justice A.K. Rajan of Madras High

Court granted an order of injunction in
a suit for infringement and passing off
on the ground that the trade marks
SABENA and SUBEENA are similar,
the colour scheme, getup are similar.

Thank you.