At present, trade secrets are protected through a combination of legal precedents and legislation. Officials said some startups and industry participants have raised concerns over a higher compliance burden, contract enforcement and the balance between trade secret protection and whistleblower rights during the discussions.
“There is a thinking in some parts of the government that no separate law is needed to ensure contract fulfilment and the extant Indian Contract Act, 1872, can be amended to achieve that aim but industry has concerns,” said an official. The Department for Promotion of Industry and Internal Trade (DPIIT) has begun consultations on a dedicated trade secrets law to protect unpatented inventions currently covered by contract law.
The Indian Contract Act provides recourse in the event of a breach of non-disclosure agreements, exposure of sensitive information and inappropriate disclosure of private information. “While some startups have concerns about a higher compliance burden under a new law, some established firms have issues about how the contracts will be fulfilled,” the official said.
The US, UK, Japan, China and the EU already have such laws. “Such a law would include a timestamp on a digital document that proves that the owner and the regulator possessed a specific piece of confidential data at an exact date and time without revealing its actual contents,” said an expert on intellectual property, adding that the government would maintain a repository of such documents.
The law may be simple, without detailed compliance requirements or return filings, the expert explained. A dedicated law is crucial as trade secrets offer benefits such as informal and relatively inexpensive protection.