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

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 […]

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 […]

Intellectual Property and its Role in the Pharmaceutical Industry

Intellectual property rights are considered to be an important asset of any corporate unit. It is an indication of the creation of mind and the work that makes one entity different from the other. With better IP or intellectual rights, it would be easy to promote the possible innovations and this would be useful in […]

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 […]

Patents – An Important Tool for Pharmaceutical Industry

For suitable protection of medical inventions, patents are the perfect option. This would also safeguard medical discoveries that are research-based and it is done by most of the pharmaceutical companies. In return for the protection offered by the patent, it can disclose the research used in coming up with the medical innovation in the pharmaceutical […]

Why Is Protection of Geographical Indication or Designation of Origin Essential?

Having knowing regarding geographical indication along with designation of origin is something that is of great need these days. Geographical indication or GI indicates a symbol, name or sign relating to a product that corresponds to a definite geographical origin, product’s features, qualities that are due from the origin. To make a sign work as […]

Lack of Music Publishing Knowledge Robbing Indian Artists of their Rights

In India there has been a lack of knowledge regarding publishing music. It can be said that a large part of publishing an art for is still unexplored. It is not about the common people but the artists and the music companies are oblivious towards it. At the initial stage due to lack of knowledge […]

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 […]

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 […]

Delhi HC’s Ex Parte Order in Coca-Cola Company & Anr vs Glacier Water Industries Ltd.

This is a case of a Delhi High court ex parte proceeding concerning trademark dilution. The plaintiff filed a suit seeking a permanent injunction, damages and to restrain them from passing off their products as that of the plaintiff. The plaintiff also pleaded the court to restrain the defendants from using the mark ‘KINLEY’ and […]