Trade secrets are included under Intellectual Property Rights. Different countries have different categories of protection regimes surrounding trade secrets. It is important to note that India yet, does not have its trade secret protection policy. This absence of legislation on trade secrets presents itself as a drawback for India to present itself as an appealing destination for foreign companies. A trade secret is a piece of information which is intentionally prevented from going out and known by others. This is a practice to avoid the essential secrets of those companies from being used in an exploitative manner by their competitors. Internationally, ‘The Agreement on Trade-Related Aspects of Intellectual Property Rights’ or TRIPS is recognized as the first multilateral instrument which handles Trade Secrets. In TRIPS, Section 7 of the agreement protects the information mentioned under Article 39.2 which is intended to stay undisclosed. The TRIPS Agreement necessitates the person or entity who possesses any such information, to take reasonable steps to protect that information from being known by someone who would use it to their competitive advantage. 

USA and India

The United States of America has something called the ‘Trade Secrets Act of the United States’. Prima facie, trade secrets are not explained any differently in the US than they are under the TRIPS Agreement. Though America does not define Trade Secrets it has an exhaustive list of factors which are meant to be considered to determine whether a specific piece of information should be deemed as a trade secret. These factors are ‘accessibility of the information to the public’, ‘competitive value of that information’, ‘monetary investment to develop that information’ and other similar factors. Unlike the United States of America, our country’s legislation has not come up with a codified piece of law that would enumerate trade secret protection. It is common knowledge that when the legislation does not take the responsibility to come up with laws for an important area, the judiciary takes steps to fill that vacuum. The judiciary has done a good job at it by sticking close to the ingredients of the TRIPS Agreement. By trying to determine what a trade secret can be by using similar factors such as accessibility to the people who normally indulge themselves in such trade and the value held by such information, the judiciary has followed the TRIPS Agreement. 

A trade secret gives the owner of such a trade secret exclusive rights over that information’s usage. This exclusive right exists only till the time that someone else does not have any access to that information. As soon as the information is disclosed by the owner, it becomes a de facto license for its usage. It is important to be highlighted here that a trade secret is different from other Intellectual Property licensing in a way that the owner has rights only over the trade secret and nothing else. The licensee does not need to pay any amount to use the information. The person who discloses the trade secret to the licensee allows using the know-how and in return benefits in the form of royalty.