ARTICLE
20 September 2018

Theft Of Confidential Information And Trade Secrets

The idea of confidential information and trade secrets is fairly new in India.
India Intellectual Property

Compiled by: Sachi Kapoor | Concept & Edited by: Dr. Mohan Dewan

The idea of confidential information and trade secrets is fairly new in India. For many people, confidential information is not a part of Intellectual Property and its commercial value is still unexplored.

Trade secrets and confidential information are often used interchangeably but there is a significant difference between the two concepts. Companies generally patent their devices/products but the method/process used to make them is often kept a trade secret. For example, all of us are familiar with Coca-Cola but the process to make it or its ingredients, are a Trade Secret.

On the other hand, confidential information might include information which is vital to a company but has nothing to do with its products or their manufacturing processes. It includes Accounting Statements, Employment Agreements, list of customers/suppliers, trade strategies and the like documents. Such information is vital to companies because if made public, it might impact the company's growth or can be used by their competitors.

It can be presumed that all trade secrets are confidential information. However, not all confidential information can be considered as a trade secret. A common example, which results in unauthorized disclosure of confidential information, is when a technical person leaves a company and carries information to its competitors.

The Delhi High Court in the case of American Express Bank Ltd. v. Ms. Priya Puri (2006)III LLJ 540 (Del) defined trade secrets as "... formulae, technical know-how or a peculiar mode or method of business adopted by an employer which is unknown to others."

Theft of confidential information and Trade Secrets in India

Unlike the United States of America where trade secrets have been protected under the statute since 1979, India currently does not have a law in place to protect trade secrets but rather protection is available under other laws such as contract law, copyright law, Designs Act, Information Technology Act and common law. One method of maintaining trade secrets in a company, particularly if the technology is complex, is to divide the technology into different components and allow access to that component to different key personnel on a need-to-know basis.

When comparing the data protection laws with other countries such as European Union's General Data Protection Regulation (GDPR) and United Kingdom's Data Protection Act, citizens and enterprises in the European Union and the U.K. enjoy various rights such as high privacy settings by default, so that the data is not available publicly without their consent and such consent can also be revoked at any point in time.

Several countries are recognizing trade secrets as a part of their Intellectual Property regime and India is also making significant development towards the same. India recently approved the National IPR Policy to include the provisions of Trade Secrets in its IP laws and also presented the draft Personal Data Protection Bill, which deals with the protection of the rights of individuals and / or corporations whose personal data is processed by the state / private entities and also provides remedies for unauthorized processing of such data, ensuring an effective legal framework for all IP rights, including protection of trade secrets. The draft Bill takes into consideration various other aspects like foreign investment and the growth rate of IT business in India, thus ensuring an overall development of Intellectual Property laws in India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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