INDIA Law and Practice Contributed by: Pravin Anand, Achuthan Sreekumar and Rohil Bansal, Anand and Anand
While the owner of an IP right can apply for reg - istration of their title with the concerned govern - mental authority, this is not available for trade secrets. Finally, the costs associated with maintaining secrecy and protection of a trade secret can be much higher in certain cases, compared to IP Trade secrets and IP rights are two different aspects, even though their genesis may be the same. The rights accrue to an owner of a trade secret either by virtue of a contract or in accordance with the principles of equitable relief under the common law, and it remains a trade secret till such time as the relevant conditions are fulfilled and it is not in the public domain. rights, which are registerable. 1.12 Overlapping IP Rights However, upon registration of an IP right (such as a patent or design right) with the governmental authority, the owner is rewarded with a monopo - listic right to the exclusion of others in rem for a certain period of time, after which any person from among the public can use the technology that was once the subject matter of said IP right. 1.13 Other Legal Theories It is possible to bring a claim for breach of fiduci - ary duty against an employee who steals a trade secret, and against a defendant for tortious inter - ference where it has induced an employee to breach a contractual confidentiality obligation to the owner/employer. As previously mentioned, trade secrets in India are protected by virtue of contractual obligations that are regulated by the Indian Contract Act, 1872. Therefore, if there is a specific agreement
with the employee to maintain confidentiality of any information given to them in the course of business, which renders exclusivity to their employer’s business, such employee can be injuncted by the court from disclosing such con - fidential information to a third party without the express consent of their employer. In AIA Engineering v Bharat Dand, AIR 2007 Gujarat (NOC) 1456, the court held that “it is no doubt true that, under common law, a servant can be prevented from diverting the trade secret and, even in a given case, a third party can also be restrained from acting in any manner on the basis of receiving such trade secret” . A rights-holder of a trade secret can also bring an action against the defendant for tortious inter - ference where it has induced an employee to breach a contractual confidentiality obligation to the employer, as the court cannot allow misuse of a trade secret by a third party under the broad principles of equity, which stipulate that whoever has received information in confidence may not take unfair advantage of it (upheld in the John Richard and Konrad Wiedemann cases). As regards claims founded on unlawful inter - ference with the business of the claimant or of enticement to breach of contract, it is important to show that there was a clear violation or wrong - ful gain that has been caused to the employee, as well as wrongful loss caused to the employer. It should also be shown that there was some trade secret or confidential information that was taken without authorisation by the employee. However, where it is impossible to identify the reasons behind the breach of the existing con - tract by the employee and the reasons for the employee joining a new employer, the court has opined that the claim cannot be enforced (see
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