The Common Law Protection Of Trade Secrets And The Need For A Statue

Dec 2022

Introduction:

A trade secret is anything you use in your business that gives you an advantage over your competitors. A trade secret can be a recipe, process, formula, strategy, technique or device that your competitors do not know, do not have, and cannot use.

With development in technology, as well as the ease of sharing, copying and storing information in the digital world, one of the biggest challenges that businesses face is the protection of their confidential business information.

There are three essential requirements for information to be classified as a trade secret:

The information must be secret. It is not generally not known among or readily accessible to persons within the circles that normally deal with that kind of information.
It must have commercial value
Holder must have taken reasonable steps to keep it secret.

Protection Under Various Laws:

Section 27 of the Indian Contract Act bars any person from disclosing any information which he acquires as a result of a contract. In India, a person can e contractually bound not to disclose information that is revealed to him or her in confidence.
Section 72 of the Information Technology Act provides for criminal remedies. If a person is found to have secured access to any electronic record, book, register, information, document, or other material without the consent of the person concerned and such first person discloses such information further then he may be punished with imprisonment for a term along with a fine.
In 2009, the Information Technology Act, under Section 43A provided for “Compensation for failure to protect sensitive personal data.” Sensitive personal data is further defined in the rules promulgated under this Act and include passwords, financial data, biometric data etc.
The Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, renders the use and disclosure of confidential information by an insider subject to prosecution under the Securities Exchange Board of India Act.
The Copyright Act, 1957: In some cases, the courts have recognized client information stored in the form of databases as copyrightable material. During the course of their operation, businesses regularly collect data. Databases are protectable under copyright law. Section 2(o) of the Copyright Act 1957 defines compilations, including computer databases, as “literary works”.
Breach of confidence: According to Indian Courts, “routine day-to-day affairs of employer which are in the knowledge of many and are commonly known to others cannot be called trade secrets.” The requirements for a cause of action for a breach of confidence are as as follows:

the information itself must have the necessary quality of confidence about it;
that information must have been imparted in circumstances imparting an obligation of confidence;
there must be an unauthorized use of that information to the detriment of the party communicating it.

Even if there is absence of a contract, courts in India have still issued injunctions based on the rules of equity.

Trending Blogs

An Overview of Copyright

WIPO defines copyright as the right of creators to ownership of their creations and to make use for commercial or other purposes. Copyright today covers literary creations, printed material, computer programs, data, audiovisual media, dance, paintings and drawings, photographs, sculpture, architecture, ad material, technical drawings and others that are the outcome of intellectual effort. From […]

Artificial Intelligence and Intellectual Property Law

What is Artificial Intelligence? The division of Science which deals with making machines equipped with human-like intelligence to act in human-like fashion and the exhibit human capabilities is known as Artificial Intelligence (AI). Multiple disciplines like Computer Science, Psychology, Philosophy, Sociology, Mathematics, Biology and Neuron Science contribute to the development of AI. Benefits Of AI […]

PTAB Should Not Disapprove Claims on the Grounds of Indefiniteness in IPR

Federal Circuit has disapproved of arguments of claims that show any reason other than anticipation pertaining to party procedures. Federal Circuit has rejected the challenge shown by Samsung Electronics America, Inc. The company challenged that PTAB can disapprove claims that are considered indefinite in IPR. Samsung has been charged on the grounds of infringing U.S. […]

Why Intellectual Property Rights

Intellectual property rights create a situation in which the inventor or the creator enjoys full ownership and rights to commercial exploitation of his creation while everyone else is excluded. The justification is that such a creation, if it has material value, must benefit the creator while preventing others who would otherwise commercially exploit the concept […]

For a music composer, lyricist, a producer, or any performer, protecting music is a big concern under the U.S. copyright protection laws. By copyright, it indicates legal protection that is offered to the original work of music of the creator from others to use it by their name. The copyright law shall prevent others from […]

Pharma Companies File 15% of Patents in India

The Indian Pharma industry is primarily known for its Generic Drugs. But recently, to push its value higher in the market, the Indian pharmaceutical industry is investing more in research and development of new drugs along with increasing the potency of the existing ones to move up the value chain. From 2013-2015, out of the […]

Liability Of Internet Service Providers In Digital Environment

Isp Liability In India: Internet Service Providers (ISPs) can be liable for the content on the sites they host. They can be liable even if they were merely passively hosting the site, unless they take down the objectionable material when they receive notice of it. The Copyright Act and the Information Technology Act includes the […]

Blockchain Technology: Is it Building a Brighter Future

What is Blockchain Technology? The Blockchain is an incorruptible digital ledger of transactions that can be programmed to record virtually everything of value. So a blockchain is a continuously growing list of records called blocks, which are linked and secured. It protects the identities of the users. Although transactions on the blockchain are not completely […]

Intellectual Property Glance

The discussion on intellectual property starts with distributing it into three categories for the same of convenience and clarity. The product of intellectual efforts: The product of intellectual effort could be tangible or intangible encompassing such outcomes as literary creations, artistic creations, books, music, song, dance, drama, sculpture, paintings and even computer programs. It must […]

Early-Stage Intellectual Property to Raise More Money

What is Artificial Intelligence? Creation of innovative ideas is what matters the most in running a business. People were least bothered to patent the designs. But with increasing use of almost similar ideas in the businesses, it is of great importance to patent the ideas. This shall help in better growth of the business and […]