This article is written by Shyam Gupta of IPEM Group of Institute. 

Introduction  

Trade secret is the part of intellectual property right. This is some kind of valuable information which is discovered by a person having secret with him. The information which can utilize in the commerce are comes in the trade secret.  

There is no statuary regulation to regulate the trade secret as like Patent act 1970, Trademark act 1999. Hence, trade secret cannot be register.  

As the above stated the trade secret cannot be register that mean the trade secret have no life, it will only valid until the person put it in the public domain. For example let suppose there is a discovery of a method to make something, so until it was keep as a confidential it was known as a trade secret, until it was produce in front of public domain. 

In the case of Coca-Cola made a choice to brand the recipe a trade secret instead of patenting it, which would have led to the disclosure of the ingredients. Since one of those ingredients may have been cocaine, Coca-Cola decided to keep the recipe as confidential information.  

This trade secret has spawned rumors of its own. One is that the recipe contains bugs or insects. Another is that two employees each know only half the recipe or that only two people know the combination to the safe where it is stored.  

In case you doubt it, corporate espionage is real. In 2006, and employee and two accomplices stole the formula and tried to sell it to Pepsi. Pepsi blew the whistle and let Coke officials know what was happening. The employee and friends were arrested. 

The secret ingredients for Kentucky Fried Chicken‘s original recipe were originally kept in Colonel Sanders’ head. He eventually wrote the recipe down, and the original handwritten copy is in a safe in Kentucky. Only a few select employees know the recipe, and they are bound by a confidentiality agreement. For better protection, two separate companies blend a portion of the herb and spice mixture. Then it is automatically processed to standardize the blending before it is sent to the restaurants.  

There are rumors of other requirements about the secret recipe. One says when KFC updates its security systems, the recipe is temporarily moved to secure location in an armored car escorted by a high-security motorcade. 

Advantages of Trade Secret  

• Trade secret does not involve any sort of registration cost, to maintain a trade secret we no need to fill any application form and no need to pay anything.  
• Trade secret protection does not require any registration. 
• Is not limited in time, it can be maintain as long as many numbers of years. 
• There is no need of discloser to the government as other intellectual properties like patent or trademark.  

In the case of Waymo V. Uber, Uber pays Waymo $245 Million equity payout to settle litigation of trade secret over driverless car. Waymo claim that Uber misappropriated eight Trade secret related mainly to light detection and ranging sensors that help self-driving car to see the world around them. Uber and Waymo reach to the settlement where uber will give an equity payout of 0.34% of its series G shares, which valued around the $245 million. 

Uber also agreed to not use Waymo secret and confidential information beyond the eight trade secret which were at the issue. 

Disadvantages of Trade Secret  

• Protection ceases if the secret is disclose. If anyone exposes the secret of any product then there is no protection further. 
• There is no safeguard against faith discover. 

Section 8(1) D of Right to Information Act, 2005 states that information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information. 

Needs of Legislative Protection of Trade Secret 

Most of the brands want worldwide expansion of their business, wants to form franchises and multi distribution ship mythology to increase their area of market. Now, the business require stable legislature which meet the regulatory need in trade secret. Such as in UK and USA, India is country where business is immersing and expanding to other countries. An enactment of trade secrets would help India to protect its business environment along with becoming an attractive investment destination for trade in the world. In the absence of legislation, trade secrets will still be under the mercy of Court judgments and minimal contractual protection. 

Dedicated legislation around trade secrets must clearly define “trade secrets” and provide for events/acts that lead to misappropriation of trade secrets. The owners of trade secrets must be entitled to adequate civil and if need be, even criminal remedies in case of such misappropriation of trade secrets. Such dedicated legislation will impart trust into the Indian business environment, and thereby provide the required impetus for businesses to innovate and safely scale themselves without the fear of losing their competitive advantage. 

Different types of Trade Secrets  

❖ Opinion 

A statement of advice by an expert on a professional not necessarily based on fact or knowledge is an opinion which is secret guidance under the trade secret.  

❖ Technical report 

A technical report (also scientific report) is a document that describes the process, progress, or results of technical or scientific research or the state of a technical or scientific research problem which is highly valuable to keep it secret and protected to being leak.  

• Technical data  

Technical data means recorded information (regardless of the form or method of the recording, including computer databases) technical nature which can be a secret in the tech industry. 

• Computer software  

A proprietary software program that allows for greater information storage or faster information retrieval is another example of a trade secret. The trade secret owner benefits from this valuable information technology—so long as they are the only one in possession of it. For example, a search engines’ algorithms, which provide customized search results to users, are closely-guarded secrets. 

• Manufacturing process and techniques  

Anything a company innovates to increase efficiency in manufacturing processes can be a protected trade secret since this process, if not known to competitors or the general public, gives the company a competitive advantage 

• Customer lists 

It has become well-known that client and customer lists are valuable trade secrets. Customer/client lists are one of the most common claims made in trade secret misappropriation cases. A quick case law search shows that in 2017 alone, no less than 150 cases were filed in state and federal courts where it was alleged that customer lists were misappropriated as trade secrets. 

• Formulas 

A protected trade secret might be a recipe for a food product or an item in the chemistry or health care sector known only to one organization. For example, the ingredients and production process to make the French liqueur Chartreuse has been a secret formula for hundreds of years. 

• Recipes 

Food and Beverage Company has trade secrets related to recipes and cooking processes. CocaCola, for example, protects its secret recipe safely locked away in a custom-built vault at the World of Coca-Cola, the company’s museum in Atlanta. 

• Business strategies 

Trade secrets can also be logistical practices or information about marketing, external costs, pricing, and other accounting data. If this business information is not publicly available, and steps are taken to keep it secret, it can be a protected trade secret. 

Trade secrets infringement 

The best way to protect an idea may be to keep it secret. However, you may find it difficult to keep a trade secret confidential within your business. If it is necessary to disclose information (or parts of it) to partners or other people in your business, make sure that everyone involved signs a non-disclosure agreement (NDA). 

If, after signing the NDA, they share the information with other people without your permission, you can sue them for breach of confidence. 

To establish that a breach of confidence has taken place, the following all have to be present: 

• the information must have a quality of confidence to it 
• there must have been an obligation of confidence, whether express or implied 
• there must have been unauthorized use of the information 

Other unfair practices in respect of trade secrets include industrial or commercial espionage and breach of contract. 

References 

• Section 8(1) D of Right to Information Act, 2005. 
• Trademark Act, 1999. 
• Patent Act, 1970. 
• KFC trade secret case.
• Coca- cola case.
• Waymo V. Uber case. 

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