Overview of the Trade Secrets Bill 2024 and Legal Framework in India
India currently does not have a codified law protecting trade secrets. Economic actors rely instead on principles of equity, common law, and statutes such as the Indian Contract Act, 1872, and the Information Technology Act, 2000. This situation has prompted the 22nd Law Commission of India to recommend a dedicated Trade Secrets Bill, 2024.
Highlights of the Trade Secrets Bill 2024
The bill’s draft defined a trade secret as information that is not generally known or readily accessible, derives commercial value from being secret, is subject to reasonable steps to keep it secret, and whose disclosure is likely to cause damage to its holder. While a holder of a trade secret is defined as any person or entity with lawful control over the trade secret.
The bill’s proposal ensures that the holder has the right to use, disclose, and license the trade secret, and to institute legal proceedings for its misappropriation. These rights are already governed by the Indian Contract Act, 1872.
Commercial Courts will be designated as the jurisdiction for suits related to trade secret misappropriation. The draft provides various remedies for misappropriation, including injunctions, damages, and the destruction of documents and materials containing the trade secret. It also includes provisions the recall or destruction of goods based on misappropriated trade secrets. In situations of national emergency or substantial public interest, the government will be able to mandate compulsory licensing of trade secrets.
In order to preserve secrecy of trade secrets, bill’s draft suggests that courts procedure will remain confidential. Additionally, it includes protections for whistleblowers, stating that illegal activities disguised as trade secrets are not exempt from disclosure. The proposal also incorporates exceptions and limitations, including provisions for public interest and compulsory licensing.
The proposed Trade Secrets Bill 2024 represents a significant step toward creating a robust legal framework for trade secrets in India. It aims to protect confidential business information, support economic growth, and address current legal inadequacies. While the bill is seen as a crucial advancement, its long-term effectiveness and adaptability to future challenges will determine its success.
