Knowhow is another important form of intellectual property
generated by R&D institutions that does not have the benefit of patent
or copyright protection. Such know-how is kept undisclosed as trade secrets.
A Trade Secret or undisclosed information is any information that has
been intentionally treated as secret and is capable of commercial application
with an economic interest. It protects information that confers a competitive
advantage to those who possess such information, provided such information
is not readily available with or discernible by the competitors. They
include technical data, internal processes, methodologies, survey methods
,a new invention for which a patent application has not yet been filed,
list of customers, process of manufacture, techniques, formulae, drawings,
training material, source code, etc. It therefore becomes imperative to
strengthen the confidentiality around the trade secret by ensuring that
contractual obligations are enforced on persons who are allowed to use
the trade secret, especially,when it is licensed to a third party.
Since there is no documentary evidence such as a Letters
Patent or a Copyright registration or a Trademark Registration to prove
that the trade secret was originally created by the proprietor, it is
essential to maintain proof of creation of trade secret either by mailing
the information to oneself and retaining postmarked and sealed envelope
or by depositing a copy of the information with a third party that would
maintain a dated copy.
Trade secret remains confidential
for indefinite period of time as per the will of the proprietor provided
the security and its confidentiality is not breached. There is no specific
legislation regulating the protection of trade secrets in India. India
follows common law approach of protection and all matters relating to
it are generally covered under the Contract
Act, 1872. So, if the information constituting trade secret is leaked,
legal action can be brought against the parties who have leaked it under
the Law of Contracts. However, in such a case the protection of trade
secret will be lost and it becomes available in public domain.
For further details on Contract Act, 1872, refer to
'Contract Law' in
the Sub-section "Industrial Acts and Legislation".