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

Need for Kashmiri Saffron to get the GI tag

The Kashmiri Saffron has been given geographical indication tag recently from Lieutenant Governor G C Murmu. The acquiring of GI tag is a step ahead in bringing the brand among the list of top ones. The tag has been given for the saffron grown in Kashmir. In this regard, it can be said that the […]

Celebrity Rights – Public, Private or Intellectual Property

Celebrity lives are mostly public these days through different sources but they too want to maintain certain privacy. This has triggered the need to maintain celebrity rights on different properties. There are several company options that are selling products with celebrity faces from bags to soaps to cosmetics to many others. It requires suitable celebrity […]

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 […]

Copyrights of Music in India

Music is an art more specifically an intangible form of art. Copyrighting a song or a melody protects the basic right of the creator. The copyright also assist the creator financially. In order to ask for copyright the creator needs to file a registration. Once the creator gains the copyright, any infringement to the copyrighted […]

Domain Name Disputes in India

Domain Name As Trademarks A domain name which is unique, capable of identifying itself and distinguishing its goods and services from those of others and acts as a reliable source identifier of concerned goods and services on the internet may be registered as a trademark. Domain Name Disputes A domain name dispute would arise when […]

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 […]

Music Law 101: What Does Copyright Law Protect?

Music Law 101 is all about protecting different musical works along with sound recordings to its original creator. As copyright can be a confusing part, it is better to know what all it protects so that it becomes easy. It is known that each piece of recording has two types of copyrights. First, it protects […]

India dropped to 40th position in International Intellectual Property Index

India has fallen to 40th position in the International Intellectual Property Index. This index helps know about the IP climate in the 53 global economies of the present year. This is as per the report US Chamber of Commerce’s Global Innovation Policy Center. As per last year’s report, India has been ranked in the 36th […]

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 […]

The Big Push to Reform Music Copyright for the Digital Age

Music creators of the present digital age should be aware of the copyright issues better due to different reasons. Music is made available on different websites, and it is necessary to prevent the increasing problem of infringement. Pertaining to this, a number of bills are proposed in Congress that can enhance royalty payment for the […]