INDIA: Law Reform Commission Proposes Trade Secrets Should Have Their Own Legislation

The 22nd Law Commission of India has recommended sui generis legislation to protect trade secrets, that is, the Protection of Trade Secrets Bill, 2024, with certain exceptions pertaining to whistleblower protection, compulsory licensing, government use, and public interest. While doing so, the Commission has paid significant attention to the text of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and India’s obligations arising from the same.

The proposed bill defines a trade secret as any information that is secret and:

• Derives commercial value on account of being secret;
• Has been subject to reasonable steps by the holder of such information to keep it secret; and
• The disclosure of which is likely to cause damage to the holder of such information.

The proposed bill categorically excludes experiences and skills an employee acquires during normal professional practice and any information disclosing a violation of any law from the definition of trade secret.

It further states that a trade secret may be lawfully acquired by an independent discovery or creation; observation, study, reverse engineering, disassembly or testing of a product or object that has been made available to the public or that is lawfully in the possession of the acquirer of the information who is not under a duty to limit the acquisition of the trade secret; or any other practice which is in conformity with honest commercial practices.

The bill, however, also provides for compulsory licensing provisions. It states that in the event of, for example, a national emergency or extreme urgency involving substantial public interest, including situations of public health emergency or national security, the Central Government may require the holder of a trade secret to issue compulsory licenses for use of that trade secret to third parties or to the government.

Remedies against misappropriation of trade secrets include injunctive relief (including ex parte), damages, rendition of accounts, profits/disgorgement of profits, delivery up, surrender, and destruction.

The bill also makes it incumbent upon the court to preserve the secrecy of the trade secret in relation to any proceeding concerning actual or apprehended misappropriation of a trade secret.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

© 2024 International Trademark Association