Trade Secret Research Paper

TRADE SECRETS

Any confidential business design, instrument, practice, process, database or information by which an enterprise can ascertain a competitive edge is defined as a trade secret. It also includes the information generated by the enterprise to submit it to the government for obtaining some license or approval to launch a product.

Under the Article 39 of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement), trade secrets are defined as ‘undisclosed information’. The criteria for an information to be called as trade secret are:

• It must not be generally known or readily accessible by people who normally deal with such information.

• It must have some commercial value as a secret.

• The owner must take

Its protectionis r Common Law based. Section 27 of the Indian Contract Act provides some sort of limited remedy as it prohibits any individual from disclosing any information which he requires as a result of a contract. There are reasons for the absence of any statute dealing with trade secrets. Due to India’s socialist pattern Indian Law has always strived for social benefits and public rights as a result of which private rights like trade secrets have not been given much importance. Indian courts have time and again recognised few information like details of suppliers and customers, pricing policies, marketing management, as crucial that can qualify as trade secrets. Also under TRIPS compliance agreement and also due to emergence of competitive environment, there has been pressure on the government for taking initiative towards enactment of granting statutory protection to trade secrets.

Identifying Trade Secrets

Distinguishing genuine trade secrets from other information that an ex-employee can use freely in the absence of covenant in restraint of trade is very important. Information is a trade secret or not can be evaluated based on:

• the degree of secrecy or knowledge of the information outside the owner’s business

• the extent to which it is known to the others involved in the business

• the measures taken to safeguard the secrecy of the

Service Systems Enterprises, Inc).

Trade Secret Protection Measures

For managing the trade secrets, following steps need to be taken:

• A list of the potential trade secret assets should be prepared with details including dates of creation, places of storage and other key information.

• Owner of the trade secret should enter into agreement employees, contractor, vendors and suppliers for ownership and confidentiality issues.

• Procedures for locked file cabinets or other security measures should be implemented for paper documents and other tangible items.

• Appropriate login protection and authorisation should be used for electronic security on network systems as well as personal computers.

• Documents should be appropriately marked as confidential or super-confidential. The access to the information should be on a need-to-know basis. There should be procedures for sign in and sign out.

• For discarding and destroying the information, separate locked bin arrangements should be incorporated.

• Accounting procedures should be introduced to track the time, money and effort spent on the creation and maintenance of trade secrets