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

Drug Patents and Generic Pharmaceutical Drugs

When a drug is manufactured and released to the market in the initial period, it is sold under a certain brand names and can only be availed from a pharmacy after being prescribed by the doctor. The patent of the drug is owned by a few brands who are the only eligible brands to manufacture […]

Alibaba IPR Report Shows Ideal Brand Protection Program

As per sources, e-commerce giant, Alibaba group has successfully gained success using intellectual property rights-protection. The giant has been able to offer quality service due to well integration of the latest technological improvements coupled with partnerships with top-rated brands. Also, external stakeholders assisted the giant in offering quality service to proactively monitor, go through rights-holders […]

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 […]

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 […]

Intellectual Property Rights in the Era of Counterfeit Goods

The industry of counterfeited products has taken shape due to the desire of customers to get hands-on high quality item at reasonable rates. They have great satisfaction in this and this is where the counterfeited goods are made available in the market. Different world markets are full of counterfeited products ranging from cosmetics, electronics, footwear, […]

Why Are Drug Patents Important Everything You Need to Know?

Before you ask for the importance of patent in the Pharmaceutical world, let us first learn about Patents. After a song is recorder, the song is approached by various music production companies who would like to rent the copyright of the song for marketing purpose and earn profit from it. And patent is almost similar, […]

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 […]

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 […]

Protection Folklores India Intellectual Property Rights

India is a land of diversity when it comes to folk and ethnic culture with hundreds of ethnic, linguistic and religious groups with diverse origins and lifestyles that, over time, intermingled in part and remained untouched in parts over centuries. Perception about folklore differs in India, mainly associated with tribals and simple rural people, rather […]

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 […]