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All about Trade Secrets

Updated on April 17, 2015


Concept of property

Property means the highest right a man can have to anything, being that right which one has to land or tenements, goods or chattels which does not depend on another’s courtesy. There are many schools of thoughts which talk about property but one in thing which is common to all is that property is considered to be proprietary right. Property is classified onto two types: corporeal and incorporeal property, former meaning property which is in material or physical form and latter meaning property which is in immaterial form or non-physical form


Intellectual property

Intellectual property is an intangible right exercisable and asserted in respect of a material or tangible work. The Intellectual property law relates to and effectively recognizes rights flowing from Intellectual activity in industrial, scientific, commercial, literary and artistic fields. It is internationally known as legal concept. They are intangible rights, though they are in respect of tangible objects. These rights accruing from tangible products are not the same rights as in tangible objects. There are two broad categories of Intellectual property assets. One is commercial based and other is product based. Commercial based Intellectual property covers trademarks, trade names, brands, geographical indications. They have no independent existence apart from the product or service in connection with which they are used. They are not product themselves. Second category covers patents, copyrights and designs. They are commercially treated as they are because they constitute products themselves. Intellectual property is all about human creativity and innovation. Intellectual property rights are considered as reward for relative and skillful work in execution of ideas. Intellectual property rights are legal rights governing the use of creations of the human mind. The recognition and protection of these rights is of recent origin.


What is Trade Secret

Trade secret is any information or knowledge that is commercially viable and generally now known. It could be a formula, computer program, process, method, device, technique, or other information that has been kept secret. There are certain ingredients of Trade Secret such as: the

information kept confidential and away from public, the information should involve certain intellectual efforts, the person who possess such information must treat them as confidential and should take all possible measures to keep it secret, the information should have certain commercial value. To confidential business information, Trade secret protection applies. Forms and types can be such as patterns, plans, formulas, compilations etc. Trade Secret protection requires responsibility and owner must do everything to protect it. One important factor to be considered here is that to prove it a secret and confidential, it must be treated as confidential. It must also carry an independent economic value and that should result from the confidentiality. The great thing about this secret it that its length is infinite and indefinite. It can be kept for as long as it is not available to third party or public. The concepts of IP laws are territorial in nature generally but trade secrets protection has jurisdictional effect.


A new idea is a property, possessed by one who discovers it but legal rights of property-like ownership originate from unfair competition, fairness and honesty being the bottom line.


Confidential information: Section 2 (3) of the Indian Innovation Bill defines confidential information as “information, including a formula, pattern, compilation program device, method, technique or process, that is secret, has commercial value and has been subjected to responsible steps to keep it secret.


Confidential information not rising to the level of trade secret may be protected by contract. Courts have also protected confidential information by virtue of implied contract.

Further, section 27 of the Indian Contract Act, 1872 (“Act”) states that agreements in restraint of trade are void. Based on judicial decisions, an employer cannot prevent an employee from working with a competitor beyond the term of his original contract.


Essentials of Trade Secret


Under the TRIPS agreement, trade secret is recognized as ‘undisclosed information’ but is surely silent on the machinery. It is very important to understand to TRIPS agreement and Paris convention which forms the basis of Trade secret and is essentials. Article 39 of the TRIPS () agreement says that member states to protect the undisclosed information, that is, trade secrets in pursuance of Article 10 bis of the Paris Convention 1976. The imperative aspect to be considered here is that the term ‘trade secrets’ is nowhere mentioned. The compulsion recognized in article 39(1) is undisclosed information. Further, India has coercion under the TRIPS agreement being a part to TRIPS to bring its IP laws in consonance with global standards which has been accentuated in article 51 of the largest constitution, which states to give respect for International Laws.


Multiplicities of factors are taken into consideration while determining that information is trade secret or not. Factors such as extent to which the information is outside the company, degree to which employees know the information, other people involved in the business and the measures taken the company to sentry the confidentiality of information and its significance and the effortlessness with which the information can be duplicated by others. Information is the currency of this era and one who protects it will cherish the fruits.

Talking about the remedy, only the common law remedies are available and common law remedy is inadequate for protection of trade secrets. If through reverse engineering or accident, the information leaks out than our law provides no remedy. Only when there is breach of contract or confidence, the remedy can be claimed. The employer’s remedy for actual disclosure, whose trade secrets have been in fact embezzled, is compensatory relief which forms the part of common form for granting relief and damages. Obviously only granting common relief will not solve the issue thus a protective attitude towards protection in this case calls for expansion of horizon and brings in granting of injunctions.




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    • Akshay07 profile image
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      Akshay Singh 2 years ago from India

      I am very glad to know that and surely I will keep up the same in future as there is lot more to come. Thank you for that keen observation Jane.

    • profile image

      Aleksey 2 years ago

      I'm just commenting to let you know what a peefcrt discovery my cousin’s child obtained going through your internet page. She noticed a great number of pieces, which included what it really is like to have a marvelous helping heart to make other people completely have an understanding of some complicated items. You truly did a lot more than people’s expected outcomes. Thanks for providing those powerful, trustworthy, revealing and also special guidance on this subject to Jane.

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