SPRING BOARD DOCTRINEA CRITICAL STUDY OF TRADE SECRET

INFORMATION

Prepared By:Suneeta Mohapatra

Roll No. 81003150006LLM, NMIMS, School of Law

Trade Secret – Meaning & DefinitionTrade Secret Law in India & USObjectives of trade secretSpringboard DoctrineCase Studies related to spring board doctrineWhat must be established to obtain a springboard

injunction? Coca-cola case study Indian Case Studies

Finding Effects of enacting trade secret law

The TRIPS Agreement on Undisclosed Information

Paris Convention for the Protection of Industrial Property, Articles 1 and 10bis

Advantages of trade secret protection Violation of trade secretsConclusion

TRADE SECRET Trade Secret provides advantage to any organisation over

their competitors who do not have that information. Trade secret is defined in Black Law Dictionary, By

Bryan A. Garner : “A formula, process, device, or other business

information that is kept confidential to maintain an advantage over competitors; information including a formula, pattern, compilation, program, device, method, technique, or process that :

TRADE SECRET CONTD....

(1) derives independent economic value, actual or potential from not being generally known or readily ascertainable by others who can obtain economic value from its disclosure or use

(2) is the subject of reasonable efforts, under the circumstances, to maintain its secrecy.”

This definition states the majority view, which is found in the Uniform Trade Secrets Act.

TRADE SECRET LAW IN US & INDIA

USEEA

UTSA

INDIAInformation Technology

Act

Trade and Merchandise Marks Act

Copyright Act

OBJECTIVES OF TRADE SECRET:

To understand the nature of trade secrets, the reasons for protecting them and the practical challenges in identifying and protecting them.

To know how to develop an effective trade secret management program.

To understand what is meant by misappropriation of a trade secret and how to prevent such misappropriation.

To know how to take various types of suitable actions to prevent violation of trade secrets.

To understand why and how to conduct a trade secret audit.

SPRINGBOARD DOCTRINE

A springboard injunction is a type of injunction designed to remove or limit the advantage that an employee has gained through unlawful activities, typically through the misuse of the employer’s confidential information.

SPRINGBOARD DOCTRINE CONTD.......

The individual is placed “under a special disability” by the injunction in order to “ensure that he does not get an unfair start”.

All of the early cases under the springboard doctrine are related to the misuse of confidential information.

CASE STUDIESRoger Bullivant Ltd v Ellis

UBS Wealth Management (UK) Ltd & Another v Vestro Wealth LLP & Others Openshaw J

Tullett Prebon Plc & Others v BGC Brokers LP & Others

WHAT MUST BE ESTABLISHED TO OBTAIN A SPRINGBOARD INJUNCTION?

That there has been unlawful behaviour on the part of the former employee/director – typically misuse of confidential information but increasingly other breaches of duty.

That an unfair competitive advantage over the employer as a result of the unlawful activity has been obtained.

WHAT MUST BE ESTABLISHED TO OBTAIN A SPRINGBOARD INJUNCTION? CONTD....That the nature and period of the competitive

advantage is more than “short-term”.

That the advantage still exists at the date the springboard injunction is sought and will continue to have effect unless the relief is granted.

COCA-COLA CASE STUDY

COCA-COLA CASE STUDY CONTD....

In1880, upon developing its secret recipe for the world’s first soft-drink, the Coca-Cola Company was presented with a dilemma of sorts. 

It needed desperately to protect what it had just developed, yet patent protection would only provide security for 17 years.

COCA-COLA CASE STUDY CONTD....

The executives at Coca-Cola weighed these factors, and determined that they had the means to keep the recipe for Coca-Cola completely secret.  Thus they chose not to file a patent.

  The FBI arrested three people in Atlanta on

charges that they conspired to steal trade secrets from Coca-Cola Co. and sell the information for more than $1.5 million to PepsiCo Inc., federal law enforcement officials said.

COCA-COLA CASE STUDY CONTD....The defendants, including one Coca-Cola

employee, who worked as an administrative assistant in the company's Atlanta headquarters, contacted PepsiCo officials, who tipped off Coca-Cola officials, were sentenced to jail.

INDIAN CASE:• John Richard Brady v. Chemical Process

Equipments (P) Ltd.• Anil Gupta v. Kunal Dasgupta

FINDING EFFECTS OF ENACTING TRADE SECRET LAW

The trade secret law will place responsibilities, accountability and obligation on all businessmen and companies.

It will make answerable to all legal persons to Trade Secret officer or equivalent officer. Trade Secret Law will update existing Trade Secret protection in various statutes.

FINDING EFFECTS OF ENACTING TRADE SECRET LAW CONTD....

Trade Secret Law will declare that what does the Trade Secret cover and define kinds of secret information.

Trade Secret Commissioner or equivalent will entertain complaints. If they are found to be breaching the Trade Secret Law then legal action can be taken.

Effected person will get the right to sue for compensation and punishment for wrongdoers

THE TRIPS AGREEMENT ON UNDISCLOSED INFORMATION

Protection of undisclosed information is addressed in Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO).

This agreement entered into force on 1 January 1995 and established an international standard requiring WTO Members to protect undisclosed information including agricultural and pharmaceutical test data.

SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION , ARTICLE 39

In the course of ensuring effective protection against unfair competition as provided in Article 10b is of the Paris Convention (1967), Members shall protect undisclosed information and data submitted to governments or governmental agencies

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION, ARTICLE 39 CONTD....

has commercial value because it is secret; has been subject to reasonable steps under the

circumstances, by the person lawfully in control of the information, to keep it secret.

Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilise new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY, ARTICLES 1 AND 10BIS.

In protecting Trade Secrets, the TRIPS Agreement references the protection provided in the Paris Convention against unfair competition.

Article 10bis of the Paris Convention highlights the nature of protection against unfair competition.

Article 1 also defines the scope of industrial property originally covered, which the TRIPS Agreement extends by explicitly providing for protection of undisclosed information.

ADVANTAGES OF TRADE SECRET PROTECTION

Trade secrets involve no registration costs;

Trade secret protection does not require disclosure or registration;

Trade secret protection is not limited in time;

Trade secrets have immediate effect.

VIOLATION OF TRADE SECRETS

To establish violation of trade secret rights, the owner of a trade secret must be able to show the following:

Infringement by or competitive advantage gained by the person/company which has misappropriated the trade secret.

The owner had taken all reasonable steps to maintain it as a secret.

There is misuse as the information obtained has been used or disclosed in violation of the honest commercial practices.

CONCLUSION

Trade secrets protection is fundamental to encourage innovative steps, foreign investments and to promote healthy competition.

In India, trade secrets is the most deserted field as there is no proper policy framework for the protection of trade secrets and some indirect provisions from contract law, criminal law and copyright law protect the trade secrets. These laws are not sufficient for adequate protection of trade secrets in India.

CONCLUSION CONTD....

It is difficult to accept the fact that Indian law doesn’t place any sort of relevance upon the growth of new and developing IPR laws in the world.New trade secret legislation is therefore, the only way to ensure strong and effective IPR protection which would in turn open up new and profitable possibilities for the business scenario in India to flourish.