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TRADESECRETSANDTHEIRPROTECTIONUNDERINTELLECTUAL

PROPERTYLAW

Author:ShardiyaSingh
LL.M(BusinessLaw)
Rollno.
2018-19

DISSERTATIONSYNOPSIS
Submittedundertheguidanceof:Dr.MithaleshVishwakarma
H.O.DSchoolofLaw

ThisdissertationissubmittedinpartialfulfillmentofthedegreeofLL.M

SeedlingSchoolofLawandGovernance
JaipurNationalUniversity
Jaipur
2018-19
Abstract:

Our world is becoming even more open and inclusive. New ideas are widely shared on
publicplatformsandmoreresearchisbeingpublishedthaneverbefore.

Inthisincreasinglycomplex,highlycompetitivehyperconnectedworldsomethingsthat
ordinarilybeprotectedbytraditionalIntellectualPropertysuchasPatents,TradeMarks
& Design Rights are best kept secrets. For eg. Coca-Cola’s taste, Google’s search algorithm has
immense value. These companies quickly recognised the value by these particular intellectual
assets lay in their secrecy andby treating them as Trade Secrets; they could maintain their
competitive advantage. Trade secrets are secrets that add value to a business. A generally less well
known form of intellectual property right, for
manyyearstradesecretshavebeenintheshadows,buttodaytheyaregainingtraction
asaneffectivewaytoprotectcertainintellectualassets.Anycommerciallyvaluableand sensitive
information- a business strategy, a new product roadmap, or list of suppliers and customers- can
qualify as a trade secret. And unlike other Intellectual Property Rights, trade secrets can protect a
much wider range of subject matter and are not limitedtoasettermofprotection.

Trade secrets are not exclusive rights like patents, and therefore cannot be enforced against
anyone who independently discovers the secret. However, any unlawful acquisition or misuse of a
trade secret either under breach of confidence or theft is actionable. And the proprietor of the trade
secret can get compensation and injunctioninrespectofsuchunlawfulacts.

Iftradesecretsareproperty,thenlawsprotectingthemarenormativelyjustified. The study


provides economic and philosophical justifications for protection of Trade
Secretsthatindeedhasclearedthedustintheairwithrespecttotheambiguityinvolved
inconsideringtradesecretsasProperty.Thisstudyfurthergivesanoutlineofthetrade secret regime that
exists in India and underlines its inadequacy in view of the statutes
existinginotherjurisdictionsthroughouttheWorld.
Definition:
Trade secret law is a branch of intellectual property law that addresses the protection of
proprietary information against unauthorised commercial use by others.
Misappropriationoftradesecretsisforbidden.1
Its forth yet important form of IPR. It can be anything a) a recipe of
food, b) Manufacturing Process, c) Technology d) a chemical formula, e)
Productdesign,f)customer&contactlists,g)Pricingschedule,h)marketingstrategy.

Any confidential business information which provides an enterprise a competitive edge may be
considered a trade secret. Trade secrets encompass manufacturing or
industrialsecretsandcommercialsecrets.Theunauthorizeduseofsuchinformationby persons other
than the holder is regarded as an unfair practice and a violation of the tradesecret.2

StatementofResearchProblem:
The research topic denotes an analytical form of research, which has been
carriedoutinordertoreviewthelawsavailableontheconceptoftradesecretsandthe need to empower the
same in ambit of Intellectual Property Laws available at national andgloballegalmandate.

The reason why researcher has chosen this topic and prepared to work on this topic is the
unavailability of uniform and patent legal framework to protect the trade secrets of a business
entity. Trade secret is information that has value by virtue of not being generally known. It is
information that makes a business truly unique. Therefore the researcher has made a deliberate
effort as to appraisal of the laws available for protection of trade secret as an IP right along with
some untouched issues like ethical issues related to employees of the business, their prohibition
and mandate of law in
caseofviolationofthesecrecy.Majorbusinesschallengeisdisciplineofkeepingtrade
secret.Thatdisciplineisputtotestwhenapersonjoinsanorganisationorbusinessor

1
TheUniformTradeSecretsAct(UTSA)andtheEconomicEspionageActof1996.
2
http://www.wipo.int/sme/en/ip_business/trade_secrets/trade_secrets.htm
employee or volunteer and is given confidential information. Employee’s loyalty and
consequencesincaseofbreachistheprimeconcernofprotectionofthesecrets.

MotivationfortheStudy?
Remembering the days back to school my friend who studied Physics and currently
pursuing MBBS, used to tell me that one of the great research challenges is trying to conceptualize
and explain dark energy and dark matter. We know that dark energy and dark matter are both out
there, and together they comprise most of the universe. But because we cannot directly perceive
them, our current ability to explain them empirically is limited. There is something parallel to the
dark energy/dark matter problem in Intellectual Property as well, namely the treatment of trade
secrets. We cannotrefutethecentralityofTradesecrets.Tradesecretsmaybethemostusedofall IP
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rights, as reported by people in business. Similar conclusions have been reported over a period of
years across different locations. Given the need for a codified Trade Secret law in India, this study
examines potential justifications for a Trade Secret Law, as well provides a comparative analysis
of the trade secret regime in different jurisdictionsacrosstheglobe.

ObjectiveoftheStudy?

Why should trade secrets not be treated like any other property? The answers to these questions
are unclear, and, in general, any case law simply does not provide a
compellinganswertothequestionofwhyweshouldhavetradesecretsandwhetheror not trade secrets
should be entitled to the same treatment as other forms of real, personal,andintellectualproperty.
Atpresent,thereisnospecificlegislationinIndiawhichprovidestheanswersfor all the above
questions. In the USA there are three layers of protection. Firstly, the federal Economic Espionage
Act, 1996 criminalizes misappropriation of trade secrets
with imprisonment up until 10 years, and organizations are subject to fines up to USD

3
February2012reportbyJohnEJankowskipublishedbytheNationalScienceFoundation,BusinessUse
ofIntellectualPropertyProtectionDocumentedinNSFSurvey(NSF12–307)
4
5,000,000 . Furthermore, the US International Trade Commission is empowered under federal
legislation to block imports of goods manufactured following a trade secret misappropriation. State
legislation on civil enforcement is highly harmonized. All the States in US, except New York,
North Carolina, and Massachusetts have adopted a "uniform act" on the protection of trade secrets.
European Commission, at the end of
2013, proposed a new Directive to harmonize the protection of trade secrets.5 This
Directive contains a number of familiar concepts and broadly follows the provisions in the
Agreement on Trade related aspects of Intellectual property Rights (herein after
‘TRIPS’)relatingtotheprotectionofundisclosedinformation.6

ResearchQuestions

a) Whydoweneedtradesecrets?

b) WhatarethelawsavailableforprotectionofTradesecretlikeotherIPRs?

c) Howtogiveteethtothecommonlawontradesecrets?

d) Consequences of Breach of confidentiality of Trade Secret on Global Business entities?

e) Measurestoimprovetheethicalandloyaltystatusofemployeesholdingsecrets ofanentity?

f) Role of Municipal laws in consonance with International laws to protect Trade


Secrets?

ResearchHypothesis:
UnlikeanyotherIntellectualPropertyLaws,breachofTradeSecretshasimmediate
andfarmorenegativerepercussionsforabusinessentity.TheTradesecretmakesa
businessuniqueinitselfwhichrequiresstringentandanimmediateredressal

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defendant convicted for violating § 1831 can be imprisoned for up to 15 years and fined $500,000 or both. 18
U.S.C. § 1831(a)(5). Corporations and other organizations can be fined up to $10,000,000. 18
U.S.C. § 1831(b). A defendant convicted for violating § 1832 can be imprisoned for up to 10 years and fined
$500,000. 18 U.S.C. § 1832(a)(5). Corporations and other entities can be fined not more than
$5,000,000forviolatingthatprovision.
5
http://europa.eu/rapid/press-release_IP-13-1176_en.htm
6
TRIPS,Art.39
mechanismincaseofitsbreach.

Researchmethodology:
Researchmeansscientificandsystematicre-examinationofexistingfactsor
knowledgetoascertainwhethertheexistingconclusioncanbevariedornot.The
researchwillbeconductedprimarilyonthebasisofdoctrinalmethod.Doctrinal
method/researchalsocalledtraditionalresearch,itinvolvesanalysisofcaselaws,
arranging,orderingandsystematizinglegalpropositionandstudyoflegalinstitutions, butitdoesmore-
itcreateslawanditsmajortoolthroughlegalreasoningorrationale
deductions.Referencewouldbemadetoconsistofprimarysourcesandsecondary
sources.Primarysourcesconsistofstatute,legislations,reports,policiesandcaselaws
secondarysourcesarebooks,journals,articlesandalsoe-resources.

ReviewofLiterature:
1. VandanaPai*&RamyaSeetharaman,LegalProtectionofTradeSecrets(2004)1
SCC(Jour)22

This article discussed the legal frame work available under the Trade Laws ,
LawsframedandadoptedbytheWorldIntellectualPropertyOrganisation(WIPO) and the
mechanism to deal with any breach or infringements available in India
andattheglobalplatform.

2. S.K.Sandeen,Theuntoldstoryoftradesecretlaw,4JOURNALOFINTELLECTUAL
PROPERTYLAW&PRACTICE841–842(2009),
http://jiplp.oxfordjournals.org/cgi/doi/10.1093/jiplp/jpp157(lastvisitedApr26,
2014)
The article cites the historical perspective of the concept of trade secret in the field of
intellectual property rights and the best kept secrets of the famous business entities along
with the critical analysis of the laws available for protectionofconfidentialityofthesecrets.

BibliographyandBooksReferred:

1. LiangGuo,TradeSecret,(2015);LegalBasis,UNITEDSTATESTRADESECRET
LAW,1–8(1990)

2. Trade Secret Protection In India, (2008); Keeping Confidence : Trade Secret


ProtectionProgram

3. Praveen K R Singh & Shweta Dubey, Trade Secrets vs . Patents in Biotech


Industry:TheIndianScenario,9–25(2007)

4. Biswajit Dhar & K. M. Gopakumar, Data Exclusivity in Pharmaceuticals: Little


Basis

5. Pravin Kamble, Swapnil Ghorpade, Rajesh Kshirsagar & Bhanudas Kuchekar,


ProgressoftheIndianpharmaceuticalindustry:ashiftingperspective,7JIPR (2012).

6. Abhinav Kumar, Pramit Mohanty & Rashmi Nandakumar, Legal protection of


tradesecrets:towardsacodifiedregime,11JIPR397-408,(2006).

TentativeChapterisation:

COVERPAGE
ACKNOWLEDGEMENT&CERTIFICATE

ABOUTTHETOPIC
ABBREVIATION
ACTSANDSTATUTE
TABLEOFCONTENTS

i. INTRODUCTION

ii. CHAPTER–1CONCEPT,MEANINGANDHISTORICAL
PERSPECTIVEOFTRADESECRET

iii. CHAPTER–2JUSTIFICATIONOFTRADESECRETASANIPR

iv. CHAPTER–3ANALYSISOFTRADESECRETREGIMESIN
DIFFERENTJURISDICTIONS

v. CHAPTER-4TRADESECRETUNDERWIPO,TRIPSANDOTHER
INTERNATIONALCOVENANTS

vi. CHAPTER–5TRADESECRETANDETHICALISSUES

vii. CHAPTER-6REDRESSALMECHANISMANDNEEDOF
CODIFICATIONOFLAWSONTRADESECRETS
TABLEOFCASES
SUGGESTIONANDCONCLUSION
BIBLIOGRAPHYANDREFERRENCES