Protection of Trade Secrets in India

Nikhil Nair


Trade secrets and confidential information are such IPR tools that can be used to protect the information regarding the security or economic worth of a nation, organization or an individual. Trade secrets and confidential information are such kinds of information that affect the commercial worth of an individual or an organization. They are an asset to a firm and can be both tangible as well as intangible.

Once a trade secret is revealed, it is nearly impossible to resume the status of that secret and hence proper measures should be taken to protect them. India, not having any strict laws regarding the protection of Trade Secrets, the courts has been adjudicating such cases on the basis of concept of equity, justice and good conscience.

What are Trade Secrets ?

Any information, know-how or confidential information protecting the business of an organization is a trade secret. A trade secret may refer to practices, designs, process, instrument, methods or compilation of data which is not known to the public and which the owner generally intends to keep that information hidden and confidential. The important factors which distinguishes a trade secret from others are –

  • It is generally known or accessible by people who normally deal with such information.
  • It must have a commercial value as a secret.
  • The owner must take reasonable care to maintain the secrecy.

If the economic value of any piece of is kept secret on which information relies then that could be called a trade secret.

Unlike Patents and Copyrights which can be protected for about 20 years and 100 years respectively, trade secrets can potentially last much longer. As long as any other person does not independently discover the information that is considered to be a trade secret, that information continues to remain a trade secret.

Under the National Innovation Act of 2008, ‘Confidential Information’ is defined as any information including a formula, pattern, compilation, program device, method, technique or process that

  • is secret in that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
  • has commercial value because it is a secret; and
  • has been subject to reasonable steps under the circumstances by the person lawfully in control of the information, to keep it secret.

Trade secrets and confidential information almost overlap each other and almost have the same properties, yet they are different in many ways.

Protection of Trade Secrets in India (Prevention is better than cure)

In India, there is no such specified law for the protection of trade secrets in India butagreements can be made to sign so that the potential important information cannot be leaked out. A person can be contractually bound to not disclose any information which is told to him in confidence. But also, confidential information cannot be defeated by the fact that it is known and open to the public at large. A person can be sued for violating the non-disclosure agreement for damages.

Employment Agreement (Non-Disclosure Agreement)

Companies can include a non-disclosure agreement in their employment contracts which prevents the employees to disclose any sensitive and confidential information regarding the company while the employee is employed in the company or even when the employee leaves the company. The agreement may prevent the employee of any such breach of confidential information the company.

Trade Secrets policy

A firm which heavily relies on trade secrets should make their employees sign such a policy so that the secret is not spilled out as it is the basic way-through to earn profits and maintain an advantage over the business competitors.

Also, in cases where the trade secret is in a physical form like blueprints, secret files etc. a strict Security System should be in place so that this kind of information never leaves the custody of the actual holder of such information.

Electronic Security checks like firewalls, virus and all kinds of protection should be used so that any secret information in the form of a soft copy does not get leaked anywhere else which affects the working of the firm.

Nikhil Nair
Vivekananda Institute of Professional Studies,
GGSIP University, New Delhi