WHAT ARE THE PROS AND CONS OF HAVING A TRADE SECRET?
Having a trade secret has its own share of advantages and disadvantages. Among the advantages include:
No registration cost.
No time limit for protection.
Protection is immediately effective.
It does not require any disclosure or registration with the government.
On the other hand, the disadvantages include:
If the secret is embodied in a product, it can be discovered through reverse engineering and patented by another party.
No protection if secret is disclosed.
It is effective against only improper acquisition and use. There is no safeguard against fair discovery.
Protection granted is weaker than that of patents.
HOW ARE TRADE SECRETS PROTECTED IN INDIA?
Surprising as it may sound, there is no law for the protection of trade secrets in India. However, this does not mean that trade secrets are devoid of any form of protection. In the absence of a statute, several judicial decisions have forwarded the cause of protecting trade secrets. However the absence of a legislative backing leaves a lot to be desired.
In India, the only means through which a trade secret can be protected is by way of a contract. Non disclosure agreements and restrictive covenants are the usually adopted means. However, this method is not fool-proof. First, such contracts are usually not favored by the courts and are unenforceable by statute in some states. Second, a criminal action cannot be brought against someone in the event of disclosure of the secret. The only source of relief is a civil suit wherein damages can be sought. However, despite the quantum of damages awarded to the Plaintiff Company or individual, the economic loss caused to the plaintiff by the disclosure of the trade secret is usually massive and results in irreparable damage.
In such a scenario, India is in desperate need of a legislation that aims at protecting trade secrets. With India being a host to various companies, both national and international, a trade secret law is imperative. Absence of such a law renders the trade secrets of such companies vulnerable and can have a crippling effect on the business of the company as well as the Indian economy.