In India there is no substantive legislation to govern the privacy and data
protection matters yet. It is very important that trade secrets and other
sensitive information as well as intellectual property rights, which need to be
kept secret of a business or an organization are kept confidential. In this
paper we have analyzed different laws and how they can help maintain the privacy
required by businesses.
Companies often acquire and use fresh and particularly revolutionary ideas that
are unfamiliar to their competition to get an edge over their competitors and
maintain the distinctiveness of their product or service. This vital information
of the company is protected by trade secrets. Any information or knowledge about
a company that is not widely accessible to the public, in addition to the
reasonable safeguards to keep such information confidential, is considered a
North American Free Trade Agreement (NAFTA) defines a trade secret as "any
knowledge of commercial importance that is not in the public realm and for which
appropriate measures have been taken to safeguard its confidentiality."
Trade secrets, generally, protect confidential business information but it can
also include technical data such as manufacturing processes, pharmaceutical test
data, computer programme blueprints, and commercial details such as customer
databases, advertising tactics and delivery methods.
In this age of globalization, nations are recognising the importance of
confidentiality and are attempting to integrate safeguards for it into their
legislative framework. Trade-related Aspects of Intellectual Property (TRIPS),
the General Agreement on Tariffs and Trade (GATT), and the North American Free
Trade Agreement (NAFTA) all contributed to the growth of trade secret protection
in the international community. However, India does not have a codified
legislation for the protection of trade secrets.
In the absence of a legislation, Trade Secrets can be recognised under Contract,
Competition, and Intellectual property laws at the same time. Its aspect can
also be found in the provisions of Constitution, Indian Penal Code and
Information Technology Act of 2000. Restrictive covenants, non-disclosure
agreements, and other contractual mechanisms can be used to safeguard them.
Furthermore, these secrets can also be protected by a common law action against
misappropriation, where misuse of trade secrets can happen as a consequence of a
breach of a duty of confidence in addition to theft.
Constitution & Trade Secrets
The Constitution of India provides certain rights such as freedom of speech and
expression which are protected as fundamental rights. The right to privacy is
also provided as a fundamental right showing how important privacy is in the
society. According to Article 19(1), every citizen must have the right to free
speech and expression, to peacefully congregate without weapons, to organise
associations or unions, and so on. Article 19(1)(g) provides the citizen with
the freedom to pursue any profession or business. However, all these rights are
subjected to reasonable restrictions.
Trade Secrets with respect to Right to Information
Freedom of speech and expression also includes the Right to information. This
right is extremely necessary for maintaining the transparent working of the
democratic government. However, it has been recognised that certain rights that
are being offered to the people of India may jeopardise document secrecy in
accordance with the Official Secrets Act.
Furthermore, section 8 of this act clearly states that "Prohibited Place" refers
to any work of defense, and then sub-section (b) of section enumerates the
restrictions on government documents. This Act specifies which kinds of data are
protected from exposure. But, if the public interest in disclosure outweighs the
damage to the safeguarded interest, these excluded information or those exempted
under the Official Secrets Act can be disclosed.
The right to information is considered to be violated when specific information
is withheld. Intellectual property is one of these exceptions. The provision in
RTI Act states that information including commercial confidence, trade secrets,
or intellectual property, the sharing of which would harm the competitive
position of a third party, unless the competent authority is satisfied that the
larger public interest demands the disclosure of such information.
As a result,
the trade secret or intellectual property is meant to be kept discreet in order
to preserve the parties' business rights. However, if the non-disclosure of such
material is in the interest of the public, the responsible authority may request
that such confidential information be disclosed.
In respect of trade secrets, the RTI Act also states that information can be
withheld if it pertains to a third party, such as a public body, or if its
publication would jeopardise the third party's or public authority's competitive
stance. The material can also be withheld if the applicant cannot evidently
demonstrate a greater public interest in disclosure. This cannot be used when
public funds are used to commit fraud. It is refused if the material relates
to/contains business confidence, trade secrets, or intellectual property of a
The Copyright Act & Trade Secret
Numerous cases involving trade secrets have been filed in Indian courts and
tribunals. In these cases, the courts were presented with copyright concerns,
and the Copyright Act was used to offer relief. To tackle infringement of
copyright, there are certain provisions under Copyright act which can be really
helpful. Section 51 of the Copyright Act deals with the conditions when the
infringement of copyright happens. The civil remedies of copyright is dealt in
Section 55 of this act whereas Section 63B of this act deals with the offences
when the infringement of copyright takes place.
Case Laws dealing with protection under Copyright Act
Puneet Industrial Controls (P) Ltd. v. Aditya Enterprises Pvt. Ltd.
The issue in this case was whether the defendant had committed copyright
infringement by exploiting the plaintiff's drawings for the manufacture of
electronic relays and timers within the sections 55 and 51 of the Copyright Act,
1957. The plaintiffs had shown a sufficiently evident case for injunction, and
the advantage was in their favour, according to the court. The court went on to
say that the plaintiffs were the genuine owners of the copyright and that they
had the right to stop the defendants from copying their products.
Tractors and Farm Equipment Ltd. v. Green Field Farm Equipments Pvt. Ltd.
In this case, the plaintiff sought an injunction prohibiting the
respondents/defendants from production, selling, offering for sale, marketing,
or explicitly or implicitly dealing in Maharaja tractors, as well as significant
imitation and procreation of the applicant's Hunter tractor's digital photos,
images, and illustrations, thereby infringing on the applicant's copyright. The
second defendant was also a former employee who was accused of leaking on the
plaintiff's trade secrets to the respondent.
The claim was filed under sections
51, 55, and 62 of the Copyright Act, but because the Hunter tractor was still an
unfinished notion, it was not a production model, and because of this, the first
respondent/defendant could not pass their products off as the applicant's.
Indian Designs Act 2000 - 390 - Sankalp
The Designs Act, 2000 ("the Act"), is a complete code in itself and protection
under it is wholly statutory in nature. It protects the visual design of objects
that are not purely utilitarian. Section 2(d) of the Act, defines a Design as:
"design" means only the features of shape, configuration, pattern, ornament or
composition of lines or colours applied to any article whether in two
dimensional or three dimensional or in both forms, by any industrial process or
means, whether manual, mechanical or chemical, separate or combined.
the finished article appeal to and are judged solely by the eye; but does not
include any mode or principle of construction or anything which is in substance
a mere mechanical device, and does not include any trade mark as defined in
clause (v) of subsection (1) of section 2 of the Trade and Merchandise Marks
Act, 1958 (43 of 1958) or property mark as defined in section 479 of the Indian
Penal Code (45 of 1860) or any artistic work as defined in clause (c) of section
2 of the Copyright Act, 1957 (14 of 1957).
The prerequisites for a design to
qualify for protection are as follows:
It should be novel and original. It should be applicable to a functional
article. It should appear on the finished product. There must be no prior
disclosure or disclosure of the design. Local classification.
According to the Locarno Agreement, designs are enrolled in different classes.
Used to classify products for the purpose of design registration, it further
assists in design search. These classes are primarily function oriented.
The copyright of the registered design is 15 years in total. The copyright of
the design is initially registered for 10 years and can be extended for another
5 years by applying for renewal.
Like all other intellectual property rights, design registration gives the
owner exclusive rights, and the owner may legally exclude others from copying,
manufacturing, selling, or trading without prior consent. I can do it. Design
registration is especially useful for companies that have an aesthetic value in
the shape of the product and want to have exclusive rights to the new original
design that applies to the product or item.
In addition, the protected design must be new or original. H. Not open to the
public in India or elsewhere in the world by prior issuance, prior use or other
means. Designs must be clearly distinguishable from designs or combinations of
designs that are already registered, already exist, or are generally known. In
addition, the design should not include scandalous or obscene content or purely
Under Article 19 of the Design Act 2000, a request for cancellation of a
design registration may be made at any time during the validity period of the
design registration by petitioning the Commissioner for the following reasons:
- The design has previously been registered in India. or
- Issued in India or any other country prior to the date of registration.
- The design is not new or original. also
- The design cannot be registered based on this law. also
- The design is not within the meaning of Section (d) of Section 2
In addition, the Secretary's order may be appealed to the High Court.
The Information Technology Act & Privacy
India's sensitivity for data protection and privacy liberties are represented
within the information technology industry, which is available even to private
individuals, as stated out in the IT Act 2000:
The Long Arm Jurisdiction:
The provisions of the Act are implemented externally, according to Sec. 1(2) and
Sec. 75 of the IT Act. As a result, if an individual (even a foreign citizen)
infringes an user's data and privacy in India using a gadget, computer, or a
network, he would be held accountable under this Act's provisions.
Modification of the computer:
When an user's device's source documents have been deleted, it affects his data
as well as his privacy rights. Persons who tamper with those computer's source
documents can face a sentence of up to three years of imprisonment or a penalty
of up to Rs two lakh, or both.
Responsibility of network service provider:
A network service provider is accountable for violation of a third party's data
protection as well as privacy rights when that third party's data or information
is made accessible to a 3rd party for the purpose of committing an offense or
breach. Nobody can publicly reveal anything about the user without the user's
consent, whether real or not, and regardless appreciative or criticizing.
they have, they would be infringing on the user's privacy rights and may be held
liable for compensation in the event of a lawsuit. The network service provider,
on the other hand, is not held accountable if it demonstrates or executes
adequate reasonable care to prevent the offense or infraction from being
If an individual accesses, uploads, adds computer pollutants, destroys,
disturbs, refuses access, or otherwise makes unauthorised use of another
person's instrument, computer, or network, he or she would instantly encroach
upon the user's privacy. Such an individual is liable to the user for
reimbursement for injuries in monetary form. As a result, data protection and
privacy rights encompass a user's ability to be secure of limits or invasions on
their person or property, regardless direct or indirect resulting from
Hacking of the device:
An individual commits hacking and thus infringes the user's data protection as
well as privacy rights if the individual induces wrongful perdition or damage by
destroying, extracting, or changing data or personal details that is present in
the user's computer resources, or by other methods destructing or impacting the
user's value or utilities.
The Indian Penal Code, 1850 [Sec. 408 & 415] - 390 - Sankalp
IPC Chapter XVII
Infringement of criminal trust by employees or employees
Any person employed as an employee or employee, or in that position employed as
an employee or employee and delegated power over property or property, shall be
imprisoned and fined for any period not exceeding 7 years. Shall be imposed.
Anyone, anyone, who is fraudulently or fraudulently deceived, induces the
deceived person to give property to others, agrees with the person who holds the
property, or is deceived. In addition, you or she will not do or fail unless he
is fooled that way. Any act or omission that may damage or cause the person's
physical, mental, reputation or property is called "fraud."
Unauthorized concealment of facts is a deception for the purposes of this
It deliberately tricks Z into pretending to be a civil servant, thereby
fraudulently tempting Z to give him credit for goods he doesn't want to pay.
Contracts and Agreements
Confidentiality or Non-Disclosure Agreements (NDAs) and Non-Compete Agreements
may be required by an proprietor or institution when engaging in commercial
contracts or commencing negotiations with possible investors, clientele, staff,
Non Disclosure Agreements
Non-Disclosure Agreements are valuable instruments for maintaining secrecy for
anyone discussing or disclosing important and vital information about their firm
or innovative concepts with another party. NDAs identify any information that
must be kept private and put responsibilities and requirements on the receiver
to keep the data private. In uncomplicated contracts, a secrecy provision could
be incorporated in the primary agreement; nevertheless, in more intricate
business dealings, businesses tend to engage into a distinct non-disclosure
agreement prior to engaging in any type of conversation.
When only one party needs to share delicate and classified data, the parties
should consider establishing a single-way confidentiality agreement rather than
a non-disclosure agreement. The non-disclosure agreement as well as the
confidentiality agreement serve identical goals. A letter of confidentiality can
also be used by businesses for simpler situations or to initiate a
confidentiality or non-disclosure agreement.
These agreements are generally made among the employers and employees. They
prohibit the employees from trying to work for a rival or starting their own
firm in the relevant industry sector after they have been fired. Non-compete
provisions are usually incorporated in the primary agreement, but in complicated
deals, a supplementary non-compete agreement could be required.
businesses in safeguarding trade secrets, marketing techniques, valuable
information related to Intellectual Property, as well as clients and customer
Non-compete agreements or provisions are a sensitive matter in Indian courts,
yet they are nonetheless commonly employed in business contracts and employment
contracts. Contracts constraining trade, commerce, or any profession are void ab
initio, as per the Indian Contract Act's sec. 27.
Even so, there are exclusions
to this rule, one of which is whenever an institution sells the goodwill of a
company with a purchaser agreeing not to carry on a nearly identical business
inside of stipulated confines if the constraints are rational. Non-compete
agreements or provisions must therefore be rational and equitable to satisfy the
The Competition Act, 2002 [Sec. 3] - 390 - Sankalp
Competition is the act of a seller seeking sponsorship from a buyer in order to
gain profit or market share. The 2002 Competition Law was enacted by the
Parliament of India and replaced the 1969 Antimonopoly and Restricted Trade
Practices Act. This applies to Indian competition law.
Following the enactment of the Competition Law ("Law") in 2002, the Competition
(Revised) Law of 2007 and the Competition (Revised) Law of 2009 were revised
twice. Two key features of the
competition law, 2002 is its framework, which provides tools to establish a
competition committee and prevent anti-competitive practices and promote active
competition in the Indian market.
Purpose of competition law
The law aims to ensure compliance with competition policies, prevent
anti-competitive practices, and provide legal frameworks and tools to provide
penalties for such conduct. The law protects free and fair competition, which
protects trade freedom.
Law aims to prevent monopoly and unnecessary state intervention.
objectives of the 2002 Competition Law are:
To provide a framework for the establishment of a competition committee. To
prevent monopoly and promote competition in the market. To protect the trade
freedom of natural and legal persons participating in the market. To protect the
interests of consumers.
The 2002 Competition Law defines anti-competitive agreements in Section 3,
stating: Or the management of goods or goods, the provision of services that may
affect competition in the Indian market. "
Such contracts, called AAEC contracts, mean contracts that significantly limit
competition. The law clearly states that such an agreement is invalid.
contracts are categorized as contracts with the following results:
Direct impact on purchase or selling price. It indirectly affects the purchase
or selling price. Limits production. Limits supply. Limits technical
development. Limits service provision in the market. Leads to the rigging of
bids. Leads to an agreed offer. Abuse of dominant position.
Abuse of dominant bargaining position is prohibited by Article 4 of the
Competition Law. Abuse of dominant positions is defined in the second part of
the same section. According to the law, a dominant position is a company that
enjoys its position and power in the Indian market and enables:
Operate independently of the competitiveness of related markets. It affects its
competition, its consumers or its favorable related markets. For example,
predatory pricing is a practice that is seen to be an abuse of the dominant
position. In simple words when a dominant enterprise engages in AAEC acts, it is
considered an abuse of the dominant position.
Conclusion (must including findings)- 300 - Sankalp
At present, Indian alternate secrets and techniques regulation is a
judiciary-made regulation, primarily based totally at the precept of fairness
and not unusualplace regulation movements in opposition to breach of self
With the jurisprudence as an entire revolving round an employee`s
duties and responsibilities closer to the enterprise concerning personal records
won all through the route of employment. Indian jurisprudence concerning
alternate secrets and techniques is doubtful on some of essential aspects,
- the scope of damages withinside the case of a breach of personal records;
- robbery of alternate secrets and techniques with the aid of using commercial
enterprise competitors; and
- procedural safeguards all through courtroom docket litigation.
Further, within side the absence of a selected alternate secrets and techniques
regulation, the courts have dominated in favour of the owner of records as
literary paintings as described below copyright regulation.
The current introduction of the National IP Rights Policy has raised hopes for
the enactment of a alternate secrets and techniques regulation, in view that
that is one of the goals of the policy. Although no time frame has been
furnished for the fulfillment of this objective, one may be positive that there
may be a alternate secrets and techniques regulation withinside the close to
Practical recommendations to defend alternate secrets and techniques
Label the records to be included as "personal", in order that personnel are
conscious that they may be managing touchy commercial enterprise records.
Restrict get entry to to databases, servers and pc packages that shop alternate
secrets and techniques.
Ensure that get entry to to servers is password included and that a appropriate
observe is displayed on pc displays while having access to touchy areas.
Educate personnel on why protective alternate secrets and techniques is
essential for commercial enterprise.
Sign non-disclosure agreements with any 0.33 events with which industrial
commercial enterprise records is shared.
Use a mixture of technical and prison answers to defend databases.
Though the regulation of alternate secrets and techniques suits into the
prevailing framework of regulation of torts, regulation of contracts and
opposition regulation, there are positive issues with recognize to its inception
withinside the area of highbrow assets rights. However, a separate law for
alternate secrets and techniques might do away with that disparity as well.
India, being a growing kingdom have to have a strong regulation for protective
alternate secrets and techniques.
The TRIPS Agreement mandated that its Member
States mustchange their legal guidelines andbring in new law to satisfy the
duties as below the TRIPS Agreement. It is time now for a statutory regulation
to return back into pressure in India that now no longer handiest protects
alternate secrets and techniques and confidentiality however additionally makes
appropriate amendments withinside the current framework of Competition Act in
opposition to misappropriation and law of such personal records.
The crook regulation of the united states, the Indian Penal Code, 1860,
additionally desires amendingthat affords for crook legal responsibility in
instances in which there's breach of self assurance or disclosure of alternate
secrets and techniques much like what exists in specific Countries. The mere
presence of a crook regulation does now no longer act as deterrence for those
who take pleasure in such practices and for this reason in depth motion and
exercise is likewise had to hold such incidents at bay.
The Companies Act, 1956
need to additionally be amended with comparable provisions that take due
diligence with recognize to alternate secrets and techniques into its ambit.
Thus, the Companies may be pro-lively and vigilant at the same time as
protective their alternate secrets and techniques. Companies, on this way and
for this purpose, have to construct a robust safety device round such records.
Companies have to additionally set up robust mental loyalty among its personnel
to in order that nondisclosure and/or non-compete agreements are extra powerful
and for this reason safeguarding its alternate secrets and techniques is
Taking the above issues into effect, it's miles affordable to be of the opinion
that Trade Secret safety in India is in its nascent level and it's miles
important for it to broaden retaining in thoughts that India as a growing united
states desires legal guidelines and law to be conducive to the commercial
enterprise surroundings as a way to rework the united states right into a
mattress of possibilities for organizations off-shoring in addition to marketers
which can be searching out opposition conducive to their organizations with out
the concern of misappropriation in their alternate secrets and techniques and
personal commercial enterprise records, the very foundation that they thrive on.
Award Winning Article Is Written By: Mr.Sankalp Mirani
Authentication No: JU100412786589-22-0622