Locating Trade Secrets under Indian Laws: A Sui Generis Mode of Protection

Abstract

India has so far resisted the push from the United States of America (USA) to bring about separate legislation that regulates trade secrets. Reports and studies categorically show that such protection is desirable. It also forms part of the minimum requirements under TRIPs. In its defence, India has reiterated that mechanisms under common law exist to effectively protect trade secrets. This paper looks into these mechanisms, primarily the Indian Copyright Act, 1957 (Copyright Act) and the Indian Contract Act, 1872 (Contract Act), and provides evidence to show that deciding on trade secret issues via these Acts in India undermines the basic premise of copyright, and ignores issues of treating confidential information as confidential. Literary work as mentioned in the Copyright Act and the settled position of law by judicial decisions is discussed in this paper. This forms the first argument in favour of sui generis protection for trade secrets. The second argument in favour of the sui generis mode of protection for trade secrets is that of retaining the confidentiality of information that is regulated by contracts. This aspect is, firstly, under-examined in evidence in the Indian cases. Secondly, under the Indian Contract Act, 1857, (Contract Act) whenever the elements of confidentiality are to be examined, it is circumvented or ignored. This thereby impedes the understanding of confidential information in these case laws. Hence, this study shows that courts have overtly interfered in the basic premise of contractual obligations vis-a-vis confidential information between two parties by reading into what constitutes a trade secret. It is this lacuna in both procedural and substantive fields that holds up the second argument for a sui generis mode of protection. The conclusions from this paper address a much-required regime change in the pre-existing model of protection of trade secrets in India not only as a result of the external push (that is necessitated by international pressure and India’s continued presence on the Priority Watch List) but also as a result of the internal indecisiveness in deciding matters before the Indian courts.