NEW DELHI: The Law Commission has suggested introduction of a new “trade secrets” law to buttress the protection for firms and businesses from third party misuse of proprietary information, by including more categories to the current list of protected domains like copyright, patents and other intellectual property.
Under the proposed Protection of Trade Secrets law the holder of trade secret shall be entitled to institute proceedings under this Act in respect of misappropriation of trade secret, to prevent further misappropriation or disclosure of trade secret in the public domain.
Trade secret is any proprietary information held by a business entity that gives it a competitive advantage in the market and differentiates its product or services.
For determining what constitutes a trade secret the commission has suggested an approach followed under the World Trade Organisation (WTO) Trade Related Intellectual Property Rights (TRIPS) Agreement where the triple criteria of secrecy, commercial value and reasonable steps is specified as the qualifying criteria.
The TRIPS agreement is the most comprehensive multilateral agreement on intellectual property and plays a critical role in facilitating trade in knowledge and creativity, in resolving trade disputes over intellectual property.
TRIPS deals with copyright and related rights, trademarks, geographical indications, industrial designs, patents, layout-designs of integrated circuits and undisclosed information.
The recommendation of the Law Commission came in a report that was prepared after a reference by the government which wanted to introduce legislation on Economic Espionage and Trade Secrets Protection. The government wanted the issue to be examined in depth before moving ahead.
“The Commission held extensive deliberations on the subject-matter with domain experts across the spectrum, ranging from judiciary and academia to the government and industry. Thereafter, the commission undertook a comprehensive study of the law relating to trade secrets and economic espionage examining at length both the concepts,” the report said.
“Consequently, the Commission is of the considered view that a sui generis legislation should be introduced to protect trade secrets… With regard to the issue of economic espionage, it is pertinent to note that it typically involves a foreign State as a party, whereas commercial espionage is between two commercial entities. Therefore, the Commission is of the considered opinion that the issue of economic espionage should be dealt with separately through a different legislation,” it added,
The Trade Secrets legislation will give a holder of trade secret right to institute legal proceedings under this Act in respect of misappropriation of trade secrets, to prevent further misappropriation or disclosure of trade secrets in the public domain.
If the misappropriation is proved then the complainant will have the option to seek damages and order for surrender and/or destruction of the documents, objects, materials, substances, or electronic files in the possession or ownership of the misappropriating party that contain or embody the trade secret.
They can also seek an order for recall, withdrawal, permanent removal, destruction of goods or products whose conception, features, functionality, manufacturing process, or marketing is substantially based on a trade secret that has been misappropriated.
The acquisition, use and disclosure of a trade secret shall not constitute an act of misappropriation when done to expose an unlawful act or professional or other misconduct, to protect public interest and for compulsory licensing.
“The Central Government, if it is satisfied, that there exist circumstances of national emergency or extreme urgency involving substantial public interest, including situations of public health emergency, national security etc., may require the holder of trade secret to issue compulsory licence for use of his trade secret to third parties or to the government,” according to the draft of the Protection of Trade Secrets that has been prepared by the commission as a part of its report Trade Secrets and Economic Espionage.
Source: The Financial Express