India eyes trade secrets law to plug big IP gap

New Delhi: The government has launched an exercise to assess the need for a standalone trade secrets law in India to protect unpatented inventions. At present, there is no specific trade secrets law in the country, and rights are enforced through the provisions of the Indian Contract Act, 1872.

The commerce and industry ministry is holding stakeholder consultations on issues such as whistleblower protection and ease of doing business in trade secrets, officials said.


"We have completed one round of consultations with stakeholders and received mixed responses. Many issues relating to ease of doing business were raised," said an official.

The discussions focused on the specific types of technical information requiring protection, whether existing laws are sufficient, insights from jurisdictions with dedicated trade secrets laws, and enforcement challenges or precedents from Indian courts.

The exercise follows the Law Commission's proposal of a Trade Secrets Bill, 2024, which defines a trade secret as "technical or business information useful for business activities, such as manufacturing or marketing methods, that is kept secret and not publicly known."

The bill states that a trade secret holds commercial value, is kept confidential, and that disclosure would harm its holder. It grants rights to use, disclose, license, and pursue legal action in case of misappropriation.

Commercial Courts will handle trade secret misappropriation cases, with remedies including injunctions, damages, and destruction of materials containing the secret, it said.

"Trade secrets are currently enforced through jurisprudence and case law as there is no specific legislation," the official added.

Many countries, including the US, UK, Japan, China, and the EU, already have such laws.

A dedicated law is crucial as trade secrets offer benefits such as informal and relatively inexpensive protection, a high threshold for protection, less onerous requirements for action, and extended protection that can last indefinitely.

However, trade secrets protection does not grant any legal monopoly to the creator of the work or invention. It safeguards creators from unauthorised disclosure, improper use, or acquisition of confidential information.

Unlike copyright, patent, or trademark, where rights are limited to a fixed period, trade secrets can be protected in perpetuity, provided their confidentiality is maintained.