Professional Documents
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BTPC-402 Lec-28
BTPC-402 Lec-28
Financial
scientific
information
information
Commercial Negative
information information
A trade secret is a formula, pattern,
physical device, idea, process, or
compilation of information which is
not generally known or reasonably
ascertainable, by which a business
can obtain an economic advantage
over competitors or customers.
A formula for a sports drink
Survey methods used by professional
pollsters, and Recipes (food)
A new invention for which a patent
application has not yet been filed
Marketing strategies
Manufacturing techniques
Computer algorithms
Secrecy
Restrict access to the information (lock it away in
a secure place, such as a bank vault)
Limit the number of people who know the
information
Have the people who know the trade secret
agree in writing not to disclose the information
(sign non-disclosure agreements)
Have anyone that comes in contact with the trade
secret, directly or indirectly, sign non-disclosure
agreements
Mark any written material pertaining to the trade
secret as proprietary
Unlimited duration -trade secrets could
potentially last longer than patents (20 years)
and copyrights
Your protection is theoretically worldwide
No application required
No registration costs
No public disclosure or registration with
government agency
Effective immediately
Formula for Coca-Cola
Secret !
Strategic
TS business patent
decision
TS
© ID
TS
•Part of the idea
What is difference between TS and Patent
T ra d e S e c re ts P a te n ts
n o r e g is t r a t io n r e g is t r a t io n
- le s s c o s t s ( b u t : c o s t s t o k e e p s e c r e t) - f e e s ( r e g is t r a t io n + m a in t e n a n c e )
- im m e d ia t e ly a v a ila b le - t a k e s t im e t o g e t p a t e n t
c a n la s t lo n g e r lim it e d in t im e
- b u t : lim it e d t o e c o n o m ic life - g e n e r a lly : m a x 2 0 y
- u n c e r t a in lif e s p a n : le a k o u t is ir re m e d ia b le - b u t : c a n b e in v a lid e d
n o p u b lic d is c lo s u r e p u b lic d is c lo s u r e
- b u t: p r a c t ic a l n e e d t o d is c lo s e - p u b lic a tio n 1 8 m a f t e r f ilin g
- if le a k o u t : T S lo s t - if P n o t a llo w e d : n o T S
Remedies to Misappropriation
1 Court Order to stop the misuse
2. Monetary damages
• Actual damages caused as a result of the misuse (lost
profits)
• Amount by which defendant unjustly benefited from
the misappropriation (unjust enrichment)
3. Seizure order
• Can be obtained in civil actions to search the
defendant's premises in order to obtain the evidence
to establish the theft of TS at trial
4. Precautionary impoundment
• Of the articles that include misused TS, or the products
that resulted of misusing
1. Independent Creation- similar formula created
with his own knowledge.
2.Unclean hands – The owners behavior is
morally wrong.
3.Laches- unreasonable delay in asserting a
claim, which may result in its dismissal.
4.Absence of secrecy protection measures- failed
in protecting its trade secret, sharing it through
publication.
5.Privileges- sharing the information before
media at court trail.
TS protection may be based on...
1. Contract law
• When there is an agreement to protect the TS
NDA/CA
anti-reverse engineering clause
• Where a confidential relationship exists
attorney, employee, independent contractors
29
What is lawful?
→ Discovery of the secret by fair and
honest means
1. Independent creation
– without using illegal means or violating agreements
or law
≠ patent
TS protection
provides
no exclusivity !
What is lawful?
2. Reverse engineering
– Common practice among software
companies: studying competitors'
products
• to make software that can interoperate with
the software being studied
• to make a product that will compete with it
33
A springboard injunction is a type of injunction designed
to remove or limit the advantage or head-start that an
employee has gained through unlawful activities,
typically through the misuse of the employer’s
confidential information.
The individual is placed “under a special disability” by
the injunction in order to “ensure that he does not get an
unfair start”
A springboard injunction is unlike any other kind of
injunction, because it is not targeted at preventing future
unlawful activity but rather its purpose is to restore a
level playing field between the parties.
Mr Ellis, Bullivant’s Managing Director, left to set up a competing
business, taking confidential information with him including a card
index with the contact details of Bullivant’s contacts, which he used
to contact those clients in direct competition.
The High Court granted an injunction prohibiting Ellis from entering
into or fulfilling any contract made with or through any of the
contacts in the card index until judgment or further order.
Ellis appealed to the Court of Appeal, arguing that the injunction
should not apply to any customers that he was able to make contact
with without using the card index.
His appeal failed on this point, the court concluding that “having
made deliberate and unlawful use of Bullivant’s property, he cannot
complain if he finds that the eye of the law is unable to distinguish
between those whom, had he so chosen, he could have contacted
lawfully and those whom he could not”.
CDA= Confidentiality Agreement
NDA= Non Disclosure Agreement
The important elements included in the
written agreement of CDA & NDA are:
1. Ownership of Inventions
2. Non Disclosure Provisions
3. Non Solicitation Provisions
4. Non Competition Provisions
Complaint is a first document which is
brought into the notice of the court by the
plaintiff and asks for the corrective measures.
The defendant is required to give response to
such complaint after receiving the summons
from the court with in stipulated time period
mentioned by the relevant court .
All the case data will be kept in Civil Cover
Sheet.
The trail note book has to be maintained
by paralegal for future assistance.
The trail note book is a binder used to
index and provide reference to the
necessary information required to handle
the case.
It contains all the relevant and important
and legal information regarding the
lawsuit.
Breach of contract takes place when a party
fails to fulfill the promise made in an
agreement.
For example the employee fails to fulfill the
promise and discloses the trade secret to other
parties, then it is known as breach of contract.
This is also treated as Breach of Fiduciary duty
that employee is failed in maintaining the
secrecy
Contract is nothing but An Agreement
Enforceable by Law.
The Ten Essential Conditions for a Contract:
1. Offer, 2. Acceptance, 3.Concensus-Ad-Idam,
4. Lawful Consideration, 5. Capacity to
Contract, 6. Free consent, 7.Legal object,
8. Possibility of Performance, 9. Intention to
create a legal relation ship 10. Writing and
Registration.
In India , violation of trade secrets will be covered under
Sec 27 of the Indian Contract act. It restricts parties in
contract from Disclosing any kind of Information.
The Special Contract Acts like , Agency law
clearly defines the Duties and Responsibilities of
the Employer and Employee.
And it provides the eligible Remedies for the
possible Damages occurred to the Owner from
the agent .
The Agent is Liable to the Owner for the loss
occurred due to him.
Always read an NDA before signing. Some
agreements are titled Nondisclosure or
Confidentiality agreements, yet their terms
have the opposite effect.
People who sign nondisclosure agreements
promising not to disclose trade secrets without
authorization from the owner.
All the employees are bound under an Implied
duty not to disclose sensitive information and
should be kept it confidential from Stake
Holders.
The Diljeet Titus case,1997.
The conflict: Illegal and unauthorized copying
of material and information belong to Titus and
company by it’s four employees.
Advocate: Arun Jaitly
Page number – 195,
Annexure 1– Model Non disclosure or
Confidentiality Agreement – 203 page.
Annexure 2-Trade Secret Bond – 210 page.