The Law Commission of India (the “Commission”) considered the view that a sui generis legislation should be introduced in India to protect trade secrets with exceptions pertaining to whistleblower protection, compulsory licensing and government use, and public interest. The Commission is also of the opinion that in defining trade secrets, the law should avoid bestowing any proprietary conceptions to the same and therefore proposed draft of such a legislation – The Protection of Trade Secrets Bill, 2024 (the “Bill”).Trade secrets are a relatively new entrant in the realm of Intellectual Property Rights (IPR), however it does not mean that they did not exist prior to traditional forms of IPR. Trade secrets have been in existence since the inception of trade and commerce itself and has been a common feature from ancient Rome to Medieval European guilds. However, modern trade secret law evolved only in the early nineteenth century England. Later on, trade secrets have been brought under the larger ambit of IPRs by their inclusion as protected subject matter under the TRIPS Agreement, which came into force in the year 1995. Having said this the TRIPS Agreement only lays down minimum criteria and there is great flexibility leading to variation across different jurisdictions, which calls for the need to address the protection of trade secrets under a specific legislation. Post 1995, the nature and size of the Indian economy changed and considering the changing requirements of the economy and demands from the industry, steps were taken by the Government for protection of the trade secrets in India through legislations and policies such as (i) The National Innovation Bill, 2008; (ii) US Interventions and (iii) National Intellectual Property Rights Policy, 2016.The Highlights of the Bill are as under: – The Bill clearly defines “Trade secret”. To be eligible as a “Trade secret” the information must be a secret, it must derive commercial value on being a secret, reasonable steps should have been taken by the holder to keep it a secret; and its disclosure must cause damage to the holder of such information. However, experiences and skills which an employee acquires or any information disclosing a violation of any law shall not amount to “Trade secret”.The Bill addresses the rights of the holder of a trade secret such as to license the trade secret for business purposes by entering into agreements, and to initiate proceedings under the Indian Contract Act, 1872 (9 of 1872) in the event of misappropriation of trade secret in the public domain.The Bill also provides for compulsory licensing if there arises a situation where the Central Government is satisfied that there exist circumstances of national emergency or extreme urgency involving substantial public interest, public health emergency and national security. The Central Government can direct the holder of the trade secret to issue compulsory license for the use of the trade secret to third parties or the Government itself, subject to a license fee. The Central Government may make rules for the purposes of grant of compulsory license, determination of license fee, other conditions, form and termination of the license.The Bill further provides that a suit for misappropriation of trade secret must be instituted in a Commercial Court having jurisdiction over the same, and that a proceeding concerning actual or apprehended misappropriation of a trade secret must maintain secrecy of the subject matter of the dispute that is claimed as a trade secret.The inclusion of whistle-blower protection and a public interest exception in the bill represents a significant stride towards ensuring ethical practices and accountability within businesses and industries. Whistle-blower protection is essential for fostering a culture of transparency and accountability. It empowers individuals to come forward and report illegal activities or wrongdoing without fear of retaliation.
TRADE SECRETS PROTECTION BILL, 2024
