INDIA Law and Practice Contributed by: Pravin Anand, Achuthan Sreekumar and Rohil Bansal, Anand and Anand
1.5 Reasonable Measures It is important for the owner of a trade secret to show that they took reasonable measures to maintain secrecy regarding such information. Trade secrets are protected in India either under contract law or through the equitable doctrine of breach of confidentiality, by way of: • restrictive covenants; • non-disclosure agreements; and • other contractual means. In Navigators Logistics v Kashif Qureshi; CS(COMM) 735/2016, the Delhi High Court rejected the claimant’s claim and complaint as it did not clearly identify the trade secret in issue, the secrecy regarding such data and what steps (apart from the secrecy clauses under the appointment letters with the defendants) the plaintiff took to maintain secrecy/confidentiality. Additionally, trade secrets can be protected by an action against misappropriation under com - mon law. Misappropriation of trade secrets may occur by way of breach of an obligation of con - fidence (whether arising impliedly or expressly) as well as by theft. The parameters for determining whether the rights-owner of a trade secret has taken rea - sonable measures for protection of their trade secret vary from case to case. While there is no “straight jacket” formula, the following are a few illustrative measures that a rights-holder can adopt. It is reasonable for owners of trade secrets to insert clauses into a technology transfer or other licence agreement, stating that the technology transferred is of a confidential nature and that the licensee is obligated to maintain confiden -
tiality, during the pendency as well as after its termination. Moreover, the owner may mandate the licensee to enter into appropriate secrecy agreements with their employees, subcontractors and visi - tors to their factory, to maintain secrecy about such trade secrets. Owners of trade secrets may even insert a cautionary notice into all technical manuals clearly stating that the information con - tained therein is of a proprietary and confidential nature. However, an ex-employee cannot be prohibited from divulging or using their skill set for a com - petitor of the owner of a trade secret. In Ambi- ence India , the High Court of Delhi held that day- to-day affairs of employment in the knowledge of many and commonly known to others cannot be called trade secrets. 1.6 Disclosure to Employees Disclosure of a trade secret to employees does not mean the information has lost confidential - ity. The presence of a non-disclosure agreement with the employees is not a mandatory require - ment for protecting the owner’s rights in a trade secret. This is judged from the facts and circum - stances of each case. Trade secrets are protected, irrespective of contract, against misuse by the employees or ex-employees, contractors or sub-contractors, licensees or ex-licensees. The case of Konrad Wiedemann states that trade secrets are pro - tected against misuse by any party who may have a relation with the claimant, irrespective of contract, based on the broad principles of equity. In Hi-Tech Systems v Suprabhat Ray (supra), the High Court of Calcutta held that a principal – in
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