Trade Secrets – Proposed Legislation
Trade Secrets – Proposed Legislation
Once we in India have taken initiative to codify trade secrets law which was otherwise in the realm of common law for which our judicial system mostly relied on the law developed in UK on breach of confidence, it is desirable that we do a whole hog to work out legislation which adopts simplified procedure for its enforcement. The legislation will generally attract Commercial Courts Act, 2015 in which attempt has been made to reduce the delays of procedural law. But there is need to further simplify the procedure. For this purpose, mediation and arbitration can also be built into proposed legislation.
Those who are dealing with trade secrets cases know that disputes in such cases generally arise between employers and their ex-employees. The employees are generally required to accept terms of employment which often transgresses Section 27 of the Contract Act, 1872 (agreement in restraint of trade) but still our judicial system has developed good deal of law on this particular issue. An ex-employees is not supposed to misuse commercially useful information belonging to ex-employer but he is entitled to make use of skill and experience which he has gained from his previous employment. There are however some penumbral pockets which cannot be readily resolved.
Similarly, there are cases in which commercially sensitive information is exchanged between corporate entities. The stakes are high in a competitive environment, particularly where considerable money has been spent in R&D work. At the same time, we need to protect our startups and small scale industries. This is a part of our economic agenda.
In all such cases, the main problem is that when disputes prolong for a considerable time, the very purpose of commercially sensitive information or trade secrets may be lost.
Now a days, every commercial entity is creating its own wealth of data which has significant commercial value. Take for example the book shop which I generally visit to purchase law books has digitally stored not only my contact details but also the books I have purchased over the years. They know my choices. They can even tell you the topics of my interest. Supposing an employee working there goes to a competitor bookseller, he can provide useful information about me. And if the competitor gives me 5% more discount I doubt I would be able to overcome this temptation!
In this digital age, the facility of copying the information is both bane and boon. Hacking the digital devices is another problem. An expeditious and effective mechanism is needed. We in India have in place mediation and arbitration laws. If cost-effective and time-effective solutions can be worked out in the proposed legislation, this may not only serve as useful tool for trade secrets law but may also provide useful tool to decide whether to extend it to other fields of business. The ultimate goal is to simply the law-enforcement as nearly as possible.
Courts are not a favourite destination of everyone. Nor is black coat given the kind of prominence which it enjoyed a few decades back. Now everyone wants quick resolution of the problem which one encounters while marching on. We can start experimenting with small areas like trade secrets law.
Trade Secrets – Proposed Legislation
Authors’ introduction: Vidya Sagar and Amolak are running the law firm, TheLawyerics, and are practising lawyers of the Supreme Court of India. They generally concentrate in their legal practice on cases relating to technology related laws. They can be reached through e-mail Id., vs.adv[at]outlook[dot]com.