The ‘Other IP Right’: Is It Time to Codify the Indian Law on Protection of Confidential Information?

Published date01 July 2018
Date01 July 2018
The ‘Other IP Right’: Is It
Time to Codify the Indian
Law on Protection of
Confidential Information?
Prashant Reddy T.1,2
Countries across the world are increasingly turning their attention to trade secret
law, either enacting new laws or amending existing laws. As India faces similar
calls to enact new laws to protect trade secrets, it is necessary to take stock
of existing Indian law on protection of confidential information. As of now India
protects confidential information either through contracts or under the equitable
duty of confidence. Any codification exercise will however have to keep in mind
several factors like the impact of a new law on employee mobility, competition,
protecting free speech, ensuring procedural safeguards for defendants and insulat-
ing employees from any possible abuse of the criminal justice system. This article
attempts to look at all these issues from an Indian perspective.
Confidential Information, Trade Secrets, Breach of Confidence, National IP Policy
Trade secret protection has rarely featured on the national agenda in India, save for one
instance in 1977 when a socialist government demanded that Coca-Cola hand over the
formula for its famous cola drink.1 Rather than disclose its formulae, which the com-
pany considered a trade secret, Coca-Cola chose to withdraw from India, re-entering
the market only a decade later, after a new government was voted into power.2
1 Sanjoy Hazarika, ‘Coke Proposal Challenged in India’ (New York Times, 5 February 1989) <http://
html> accessed 21 April 2017.
2 ibid.
Journal of National
Law University Delhi
5(1) 1–21
2018 National Law
University Delhi
SAGE Publications
DOI: 10.1177/2277401718787951
Assistant Professor, National Academy of Legal Studies & Research (NALSAR), Hyderabad, India.
External Fellow, Applied Research Centre for Intellectual Assets & the Law in Asia (ARCIALA),
School of Law, Singapore Management University (SMU).
Corresponding author:
Prashant Reddy T., Assistant Professor, National Academy of Legal Studies & Research (NALSAR),
Hyderabad, India.
2 Journal of National Law University Delhi 5(1)
A lot has happened since 1977. India opened up its national economy in 1991
to foreign investment and trade. It became a member of the World Trade Agreement
(WTO) and signed the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) in 1994.3 While the issue of pharmaceutical patents was the most
contentious point of negotiation for India, it did have other issues of disagreement
with the TRIPS agenda. Trade secrets was one such issue. In one of its early commu-
nications pertaining to the negotiations related to TRIPS, the Indian government
argued that ‘trade secrets cannot be considered to be intellectual property rights’.4
Rather, it argued that the enforcement of secrecy and confidentiality ‘should be
governed by contractual obligations under the relevant provisions of appropriate
civil law’, and not by IP law.5 This submission was in line with its domestic legis-
lation. Notwithstanding India’s principled objection, trade secrets became a part of the
final text of TRIPs. Article 39, in particular, imposed an obligation on contracting
states to provide the means to protect ‘secret information’ that has ‘commercial
value’ from disclosure without the consent of the persons who have maintained
the secrecy of such information. Although India enacted new laws and amended
existing laws to meet its obligations under TRIPs, it did not enact any new laws
on the issue of trade secret protection. This likely meant that the Indian govern-
ment considered its existing laws sufficient to comply with the requirements
of Article 39 of TRIPs.
In the last decade, trade secrets, or as it is known in India, protection of
confidential information, has come back on the government’s agenda on three
different occasions. The first was in 2008, when the Department of Science &
Technology (DST) of the Government of India, proposed a legislation called the
National Innovation Bill, 2008 that amongst other things, would have created a
statutory legal regime to protect confidential information.6 That Bill disap-
peared from the agenda without even being introduced in Parliament. The second
time was in 2015 when the United States Trade Representative (USTR), after a
round of trade talks between the Indian and American governments, put out a
press release stating that both governments were ‘committed to strong protection
of trade secrets’ and that they had ‘agreed to deepen cooperation on trade
secrets’.7 Prior to these talks, the USTR had occasionally prodded India, in
annual Special 301 reports, to provide an ‘effective system’ for protection
3 Agreement on Trade-Related Aspects of Intellectual Property Rights (15 April 1994) TRT/
WTO01/001 <>.
4 Communication from India, ‘Standards and principles concerning the availability scope and use of
Trade-Related Aspects of Intellectual Property Rights’ (Negotiating Group on Trade Related Aspects
of Intellectual Property Rights, including trade in counterfeit goods: Multilateral Trade Negotiations
The Uruguay Round, (10 July 1989) MTN.GNG/NG11/W/37 <
English/SULPDF/92070115.pdf> accessed 21 April 2017.
5 ibid.
6 Shamnad Basheer, ‘India Unveils “National Innovation Act”’ (SpicyIP, 1 October 2008) <https://> accessed 21 April 2017; National
Innovation Act, 2008 <
novationlaw.pdf> (PRS India) accessed 21 April 2017.
7 India and United States, ‘Joint Statement on the Trade Policy Forum’ (USTR, 2016) <https://ustr.
Statement-TPF> accessed 21 April 2017.

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