Article: Does the use of trademark as ‘keywords’ amount to trademark infringement?

Introduction:

In the Internet era, it is usual to browse through search engines to look for particular goods and services. The term ‘keyword advertising’ has not been defined under the Trade Marks Act, 1999 (“Act”) or any other Indian statute. However, Google help center defines the term Keyword as, “Words or phrases describing your product or service that you choose to help determine when and where your ad can appear.”[1] The question that arises here is that does use of third-party trademark as keywords amount to trademark infringement?

Trademark Infringement Under the Statute

Section 29 (1) of the Act, provides that a registered trademark is infringed when a third-party uses identical or deceptively similar mark in the course of trade. Further, Section 29 (6) of the Act clarifies that a person uses registered mark if –

“…(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under. the registered trade mark, or offers or supplies services under the registered trade mark;

…(d) uses the registered trade mark on business papers or in advertising.”

It is unclear if the use of a keyword, amounts to the use of the mark in course of trade and as advertisement under Section 29 of the Act.

Judicial Interpretation 

The issue of keyword advertising came up before the Madras High Court in the case of Consim Info Pvt. Ltd. v. Google India Pvt. Ltd. and Ors. [2010 (6) CTC 813], wherein the plaintiff claimed to be registered proprietor of twenty-two trademarks such as Bhartmatrimony, Tamilmatrimony, Telegumatrimony, etc. The plaintiff was aggrieved that the respondent no. 1 (Google India Pvt. Ltd.) was using its trademarks as keywords for advertising the websites of respondent no. 2 and 4 (proprietors of the matrimonial service web portals). The plaintiff contended that the use of its registered marks in the advertisement title or text of such sponsored links, amounts to trademark infringement.

A Single Judge Bench (V. Ramasubramanian, J.), of the High Court of Madras, held that “…use in the adtitle and adtext of their advertisements in the ‘sponsored link’ column, the words which form part of the registered trade marks of the plaintiff, then it would certainly be an use in advertising and an use in the course of trade”.

On the issue of likelihood of confusion, it held that “…the use by the defendants…of the very same combination of words, namely ‘Tamil Matrimony’…even if they leave a space in-between the two words, certainly provides a likelihood of confusion. Therefore, under normal circumstances, the plaintiff will be entitled to an injunction, for the simple reason that the others are not entitled to use the very same combination of words with just a space in-between and claim that both these words are just generic or descriptive…. the same cannot take them to the desired destination.  defendants 2 to 4 would be left with any other choice, to advertise their services, if the use of the combination of the above words is prohibited.”

The Single Judge Bench did not hold the respondents liable for trademark infringement due to the descriptive nature of the words but made an important clarification that if the registered trademarks of the plaintiff were not descriptive of the nature of its services, then it would have ruled differently. Thereafter, a Division Judge Bench [P. Jyothimani and M. Duraiswamy, JJ.][2] of the Madras High court in the appeal filed by the plaintiff concurred with the Single Judge Bench ruling.

Further, the similar issue came up in the High Court of Delhi in the case of Policybazaar Insurance Web Aggregator & Anr. v. Acko General Insurance Ltd. & Ors. [CS(Comm) 260/2019, order dated May 16, 2019], wherein a Single Judge Bench [Sanjeev Narula, J.] ruled that use of the plaintiff’s marks POLICY BAZAAR as keywords by the defendant amount to infringement under the Section 29 of the Act and accordingly, granted an ex-parte ad-interim injunction restraining the defendant from using the plaintiff’s marks as keywords. However, the ad-interim injunction was lifted by High Court of Delhi (by the order dated May 28, 2019) on the separate grounds.

Conclusion

It is clear from the above discussed cases that use of a trademark as keywords will qualify as use of the mark in the course of trade and as advertising under Section 29 of the Act. Therefore, use of trademark as keywords by search engines or third-parties will amount to trademark infringement under the Act.

References –

[1] https://support.google.com/google-ads/answer/1704371?hl=en, last accessed on January 14, 2021.

[2] Consim Info Pvt. Ltd. v. Google India Pvt. Ltd. and Ors., [2013 (54) PTC 578 (Mad)].

[3] Consim Info Pvt. Ltd. v. Google India Pvt. Ltd. and Ors. [2010 (6) CTC 813].

[4] Policybazaar Insurance Web Aggregator & Anr. v. Acko General Insurance Ltd. & Ors., [CS(Comm) 260/2019, order dated May 16, 2019 and May 28, 2019].

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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Article: Can Domain Names with Common and Descriptive Words be Protected as Trademarks?

Introduction

It is often seen that domain names made up of common and descriptive words are the most sought after and hence most valuable. According to Business Insider[1], <cameras.com> was sold for $1,500,000, <ticket.com> for $1,525,000, <datarecovery.com> for $1,659,000, <auction.com> for $1,700,000, etc. Since it is an established principle that domain names are regarded as trademarks in India, the question then arises – can domain names made up of common and descriptive words be granted protection as trademarks as well?

 Common and Descriptive Marks vis-à-vis Trade Marks Act, 1999

Section 9(1) of the Trade Marks Act, 1999 (“Act”) deals with marks comprising of common and descriptive words, in the sense that it states that marks which are devoid of any distinctive character or which consist exclusively of marks or indications which denote the kind, quality, quantity, intended purpose, etc. are not to be granted registration. The provision also provides an exception to the above rule, i.e., such marks can be granted registration if it has acquired a distinctive character as a result of use or is a well-known trade mark.

Further, Section 32 of the Act provides that a mark registered in contravention of Section 9(1) can be maintained on the Register, if it has acquired distinctiveness on account of use after its registration and before commencement of any legal proceedings questioning its validity.

Judicial Precedents in India

Indian courts and tribunals have adopted varied stances while dealing with the issue of enforceability and registrability of common and descriptive words in domain names. Some judicial pronouncements state that domain names containing common or descriptive words are not suitable for protection as a trademark unless they successfully meet the threshold of reputation and acquired distinctiveness. On the other hand, there have been judicial decisions wherein the courts have held that domain names made up of combinations of common or descriptive words can be granted trademark protection. For instance, in the case of Indian TV Independent News Services Pvt Ltd v. India Broadcast Live LLC [2007 (35) PTC 177 Del], the combination of ordinary words ‘India’ and ‘tv’ in the domain name <indiatvnews.com> was observed to be unique by a Single Judge Bench [Sanjay Kishan Kaul, J.] of the High Court of Delhi.

In 2002, in the case of Info Edge (India) Pvt. Ltd. v. Shailesh Gupta [(2002) ILR 1 Delhi 220], a Single Judge Bench [Mukundakam Sharma, J.] of the High Court of Delhi restrained the defendant from using the mark/domain name “Naukari.com” on account of the plaintiff’s mark “Naukri.com”. While acknowledging the distinctiveness acquired by the plaintiff’s mark “Naukri.com”, the High Court of Delhi also held the mark to be inherently distinctive on account of use of a Hindi word in the domain name. The High Court of Delhi stated “There is definitely peculiarity in the aforesaid domain as the plaintiff has adopted a Hindi word with English script. Thus, a distinctiveness could be attributed to the said domain name of the plaintiff.”

However, similar relief was not granted to the owners of other domain names with Hindi words. For instance, in the case of Manish Vij and Ors. v. Indra Chugh and Ors. [AIR 2002 Del 243], a Single Judge Bench [S.K. Agarwal, J.] of the High Court of Delhi did not enforce the plaintiff’s trademark “kabadibazaar.com” against the defendant’s similar domain name “kabaribazaar.com”. Even in the case of People Interactive (India) Pvt. Ltd. v. Vivek Pahwa & Ors. [2016 (68) PTC 225 (Bom)], a Single Judge Bench [G.S. Patel, J.] of the High Court of Bombay refused to enforce rights in the mark “shaadi.com” on account of lack of distinctiveness and descriptiveness of the mark.

Conclusion

Domain names with common and descriptive words are particularly useful for businesses and have been granted trademark protection in India. However, these registrations could be susceptible to cancellation owing to lack of distinctive character and descriptiveness (in absence of sufficient use of the mark to show acquired distinctiveness). Judicial precedents make it clear that enforceability of such descriptive domain names is weak as well. It seems that extensive use of the domain names and consequently acquired distinctiveness, goodwill and reputation are the best means to obtain as well as maintain registration of domain name names comprised of common and descriptive words under the Trade Marks Act, 1999.

Reference:

  1. https://www.businessinsider.com/the-20-most-expensive-domain-names-urls-2011-4?IR=T#18-tie-camerascom-1500000-1, last accessed on January 6, 2021. 
  2. Indian TV Independent News Services Pvt Ltd v. India Broadcast Live LLC [2007 (35) PTC 177 Del].
  3. Info Edge (India) Pvt. Ltd. v. Shailesh Gupta [(2002) ILR 1 Delhi 220].
  4. Manish Vij and Ors v. Indra Chugh and Ors. [AIR 2002 Del 243]
  5. People Interactive (India) Pvt. Ltd. v. Vivek Pahwa & Ors. [2016 ( 68 ) PTC 225 (Bom)].

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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Article: Is a Single Colour Mark Registrable?

Introduction

Colour marks fall in the non-conventional category of trademarks and are capable of being granted protection in India. Within colour marks, the registrability of a combination of colour marks is well-settled and relatively easy. However, when it comes to the protection of single colour marks, the position is rather unclear. This article aims to shed light on this conundrum.

Relevant provisions

The Trade Marks Act, 1999 (‘the Act’), does not define colour marks per se but they find their mention in the definitions of a trademark and a mark. Section 2(1)(zb) of the Act defines a trade mark as “…a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours…” Further, section 2(1)(m) of the Act states that a “…mark includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof…”.

From a plain reading of these provisions, though it appears that protection can only be granted to a combination of colours and that a single colour mark is incapable of registration, the issue is far complex. The definitions provided above are inclusive in nature rather than exhaustive.

This is also supported by the draft Manual of Trade Marks (‘draft Manual’), which states that “…A single colour may be registerable as a trade mark if it is very unusual and peculiar in a trade and is recognized by traders and consumers alike that it serves as a badge of origin for that class of goods.” The draft Manual states a single colour mark can be eligible for protection if it can show acquired distinctiveness. It provides that “Wherever the exclusive right to color is sought, weighty evidence should be necessary to overcome objection under Section 9(1)(a) of the Act.” It further states that “…If a particular colour of packaging has become distinctive in fact as indicating the goods of a particular trader, there is no reason why it should not be protected by registration.” 

Judicial trends on the issue

The question of registrability of a single colour mark has arisen before the Courts in India for some time now. However, the position remains unsettled, given a set of conflicting judgements on the issue.

One of the earliest instances was in the case of Colgate Palmolive Company v. Anchor Health And Beauty Care Pvt. Ltd. [2003 (27) PTC 478 Del] before the High Court of Delhi. In the case, while acknowledging the significance of trade dress and colour combination, a Single Judge Bench (J.D. Kapoor, J.) held that “…Even a single colour has been held to be a trade mark. There may be exception also. Exception is that where the colour cannot be protected as the blue colour is for the Ink and red colour is for the lipstick. Red and white has nothing to do with the pink. Teeth as white line and Gum as Pink colour alone at least sometimes can meet the basic requirements as a trade mark.” Thus, the Court took the view that a single colour mark can be a trademark and is protectable.

A contrary view was taken in Cipla Limited v. M. K. Pharmaceuticals [2008 (36) PTC 166 Del] by the High Court of Delhi. A Single Judge Bench (Shiv Narayan Dhingra, J.) while denying protection to a blister packaging containing a distinctive orange coloured tablet, held that “…It is settled law that there can be no monopoly over colours…Merely because plaintiff has started using a particular colour for its tablets plaintiff does not get monopoly over colour so that no one else can use that colour. The medicines are not bought by colours by the customers.” 

In a notable decision of the High Court of Delhi in Christian Louboutin Sas v. Mr Pawan Kumar & Ors. [2018 (73) PTC 403 (Del)], a Single Judge Bench (Mukta Gupta J.) held that Christian Louboutin’s “…’RED SOLE’ trademarks have acquired a well-known character…”. The issue again came up before the High Court of Delhi in Christian Louboutin Sas v. Abubaker & Ors. [2018 (74) PTC 301 (Del)]. In the instant case, the plaintiff had filed a suit alleging infringement and passing off of its registered RED SOLE trademark. A Single Judge Bench (Valmiki J. Mehta, J.) relying on the above-mentioned definitions under sections 2(1)(zb) and 2(1)(m), held that “…Combination of colours is sine qua non, and meaning thereby that quite obviously one single colour, as contra-distinguished from combination of colours, cannot be a mark falling in the definition of mark. Hence, a single colour not being a mark, the single colour cannot be claimed as a trademark.” The Court in the instant case held that the registration awarded to the RED SOLE mark itself was invalid and hence, no relief could be granted. 

This judgement has, however, been set aside by the Division bench (S. Muralidhar And I.S. Mehta, JJ.) of the High Court of Delhi in Christian Louboutin Sas v. Abubaker & Ors. [2019 (78) PTC 262 (Del)]. The Single Judge Bench judgment was set aside on procedural grounds and the Court did not make any comments on the merits. However, in light of the Single Bench Judgement being set aside, the issue of registration of single colour marks is again open for debate.

Conclusion

From the above discussion, it is clear that the issue of registration of a single colour mark is far from settled. Protection of a single colour mark is evolving and relies heavily on evidence and discretion of the Courts/Examiner. The draft Manual acknowledges issues and provides that there must be evidence that consumers recognise the colour and use it as a trademark for specific goods and services. The debate on protection of single colour mark as trademark needs to be further examined and deliberated on by a larger bench of the High Courts or the Supreme Court of India.

References –

[1] Draft Manual Ch III, at 3.2.4, available at

 <http://www.ipindia.nic.in/writereaddata/Portal/IPOGuidelinesManuals/1_32_1_tmr-draft-manual.pdf>, last accessed on January 2, 2021

[2] Colgate Palmolive Company v. Anchor Health And Beauty Care Pvt. Ltd. [2003 (27) PTC 478 Del].

[3] Cipla Limited v. M. K. Pharmaceuticals [2008 (36) PTC 166 Del].

[4] Christian Louboutin Sas v. Mr Pawan Kumar & Ors. [2018 (73) PTC 403 (Del)].

[5] Christian Louboutin Sas v. Abubaker & Ors. [2018 (74) PTC 301 (Del)].

[6] Christian Louboutin Sas v. Abubaker & Ors. [2019 (78) PTC 262 (Del)].

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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Article: Whether Parallel Import Of A Literary Work Is Permitted Under The Copyright Act?

Introduction

‘Parallel imports’ mean imports of genuine goods from one market into another market without authorization from the proprietor of the intellectual property. Legality of such parallel imports depends on whether the importing market follows national or international doctrine of exhaustion of rights. This article examines the statutory provisions in the Copyright Act, 1957 (“Act”) involving the doctrine of exhaustion and its impact on the legality of parallel imports vis-à-vis literary works in India. 

Principle of Exhaustion as per Copyright Act

Section 14 of the Act provides that the owner of the copyright in literary works has various rights such as right to reproduce, to perform work in the public, etc. Further, Section 14(a)(ii) of the Act provides the right to “issue copies of the work to the public, not being copies already in circulation” (emphasis supplied). The explanation to section 14 clarifies that the expression ‘copies already in circulation’ means “…a copy which has been sold once shall be deemed to be a copy already in circulation”.

Section 14 of the Act and explanation attached to it fail to elucidate where such copies are deemed to be in circulation, and thus, it has been left open for interpretation by the Courts as to whether national, regional, or international principle of exhaustion applies. This leads to the question if parallel importation of literary works is allowed in India. Section 14 of the Act can be interpreted in various ways. For instance, a plain reading of the expression “copies in already in circulation” can be interpreted to mean copies in circulation anywhere in the world, which means that the Act permits parallel imports. However, another possible interpretation is that the expression could mean copies in circulation in India only, thus parallel imports would not be permitted under the Act.

It is also pertinent to note that the Copyright Amendment Bill, 2010 (“Bill”), which was passed by the Parliament in 2012, originally sought to add a proviso to Section 2(m) of the act as – 

“Provided that a copy of a work published in any country outside India with the permission of the author of the work and imported from that country into India shall not be deemed to be an infringing copy.” (emphasis supplied)

The Parliamentary Standing Committee for Review welcomed the proviso to Section 2(m) and noted that “…proposed inclusion of the proviso in the definition of the term ‘infringing copy’ seems to be a step in the right direction…” [1]. However, it was deleted from the final version of the Bill which was passed by the Parliament.

This proviso can also be interpreted in various ways to support either national or international principle of exhaustion. One interpretation is that the aim of introducing such proviso was to clarify that the Act follows the principle of international exhaustion. While another argument which stems from is that such proviso was included to change the position of law from national exhaustion to international exhaustion of rights, as otherwise a specific provision for international exhaustion would not have been proposed in the Bill. 

Judicial Interpretation 

The issue of parallel import of literary works was taken up for consideration by the High Court of Bombay (“Court”) in Eurokids International Pvt. Ltd. v. India Book Distributors Egmont[2005 (6) Bom CR 198], wherein a Single Judge Bench [Dharmadhikari S.C., J.] injuncted the defendant from importing the plaintiff’s books from the USA and selling in India without a license. The Court came to such a conclusion on the basis that the plaintiff has an exclusive license to sell its books in India and import of such books by the defendant would be in contravention and amount breach of such license. The Court also relied on the earlier case of Penguin Books Ltd v. India Book Distributors[AIR 1985 Del 29], where a Division Bench [A Rohatgi, G Jain, JJ.] of the High Court of Delhi ruled that “…It is also an infringement of copyright knowingly to import into India for sale or hire infringing copies of a work without the consent of the owner of the copyright…”. However, the Court failed to take into consideration that the Penguin Books judgment was prior to the 1994 amendment of the Act which took away the right of publication from the owners of literary works and replaced it with the present Section 14(a)(ii) containing a right “…to issue copies to the public not being copies already in circulation”. It is important to note that while reaching to this conclusion the Court did not take into consideration the doctrine of exhaustion and validity of parallel import under Section 14(a)(ii) of the Act and ruled on the basis of breach of license contract (between the plaintiff and a third-party).

This issue came up again before the High Court of Delhi in Warner Brothers [2] case, where it acknowledged the applicability of doctrine of exhaustion in the Section 14(a)(ii) of the Act. However, it fell short of stating whether such exhaustion was national or international. Thus, as of now the question of parallel imports under the Copyright Act is far from being settled. 

Conclusion 

As discussed above, the principle of exhaustion vis-à-vis Section 14(a)(ii) of the Act has not yet been interpreted by the courts. Resultantly, the prevailing position of law considering Eurokids case is that the principle of national exhaustion is applicable till the time this issue is taken up for further consideration by the courts. An attempt was made to clarify this ambiguity by introducing a proviso to Section 2(m) of the Act, however it was aborted before it could have been debated in the Parliament. It is to be seen whether this ambiguity will be addressed by the Parliament or Copyright Office in the next amendment of the Act. 

References –

[1] Department – Related Parliamentary Standing Committee on Human Resource Development, available at <http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20HRD/227.pdf>, last accessed on December 30, 2020.

[2] Warner Brothers Entertainment Inc. v. Santosh V.G., MIPR 2009 (2) 175.

[3] Eurokids International Pvt. Ltd. v. India Book Distributors Egmont [2005 (6) Bom CR 198].

[4] Penguin Books Ltd v. India Book Distributors [AIR 1985 Del 29].

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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Article: Are Trade Secrets Protected Under the Contract Act?

Introduction

Trade secrets are a competitive advantage of any business. The commercial value of trade secrets remains as long as confidentiality is maintained. Trade secrets can be in various forms, like secret recipes, marketing methods, business practice, etc. Companies like Coca Cola, KFC reportedly value their secret recipes, and these recipes are considered as trade secret for their businesses. It is important to note that in India, there is no special statutory protection available for trade secrets.

Trade Secret- the lesser known IP

Article 39.2 of the Trade-related Aspects of Intellectual Property Rights (TRIPS) provides that following three criteria should be taken into consideration to determine if the information is a trade secret – 

  1. The information is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons that normally deal with the kind of information in question;
  2. The information has actual or potential commercial value because it is secret; and
  3. The person lawfully in control of the information has taken reasonable steps under the circumstances to keep it a secret.

A Single Judge Bench (Anil Kumar, J.) of the High Court of Delhi in the case of American Express Bank Ltd. v. Ms. Priya Puri [(2006) IIILLJ 540 Del] defined a trade secret as “…a trade secret is some protected and confidential information which the employee has acquired in the course of his employment and which should not reach others in the interest of the employer…A trade secret can be a formulae, technical know-how or a peculiar mode or method of business adopted by an employer which is unknown to others”. However, the Court also observed that “…routine day-to-day affairs of employer which are in the knowledge of many and are commonly known to others cannot be called trade secrets.”

A Trade secret is valuable to a business as long as it is confidential information. Thereby, the owner of a trade secret needs to make efforts to protect such confidential information. To protect confidentiality of its information, the owner of the trade secret can take measures such as entering into non-disclosure agreements with its employees or with any concerned party to whom disclosure of the trade secret is necessary for the business purpose. 

Judiciary and Trade Secret Protection

It is often hard to determine what kind of information will qualify as a trade secret, or what measures can be taken in case of disclosure of trade secrets but various judicial decisions have shed some light on this issue. In the case of Bombay Dyeing and Manufacturing Co. Ltd. v. Mehar Karan Singh [2010 (112) Bom LR 375], a Single Judge bench (Smt. Roshan Dalvi, J.) of the High Court of Bombay laid down the following factors to determine if an information will qualify as a trade secret:

“i. The extent to which the information is known outside the business;

ii. The extent to which it is known to those inside the business, i.e., by employees;

iii. The precautions taken by the holder of the trade secret to guard the secrecy;

iv. The savings affected and the value to the holder in having the information as against competitors;

v. The amount of effort or money expended in obtaining and developing the information; and

vi. The amount of time and expense it would take others to acquire and duplicate the information.”

The courts have also pointed out that legal protection of a  trade secret is also dependent upon the proven measures taken by the owner of a trade secret. It means the court will also assess if the owner of a trade secret had taken sufficient steps to protect such trade secret in order to determine a breach of confidentiality. In the case of Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam [I.A. Nos. 388/2004 (U/S 39 R 1 & 2), Order dated August 2, 2011 ], a Single Judge Bench (S. Ravindra Bhat, J.) of the High Court of Delhi said observed “With sufficient effort or through illegal acts rivals may access trade secrets…However, if the trade secret or information owner proves that reasonable efforts were made to keep the information confidential, it (the information) remains a trade secret and is legally protected. If, on the other hand, trade secret owners cannot establish reasonable efforts to protect confidential information, they risk losing the quality of confidentiality of the information even if its information is obtained by rivals without permission”.

Non- disclosure agreements and the Indian Contract Act

Non-disclosure agreement is one of the ways by which the owner of a trade secret can protect its confidential information. However, it is important to note that Section 27 of the Indian Contract Act, 1872 (“Contract Act”) provides that any agreement in restraint of trade will be void. Although, any agreement, which bars any formal former employee to disclose any information which he/she had acquired during his/her employment, is not void under Section 27 of the Contract Act. In respect of this, a Single Judge Bench (R Chopra, J.) of the High Court of Delhi in Ambiance India Pvt. Ltd. v. Shri Naveen Jain [122 (2005) DLT 421], stated that, “An employee, particularly, after the cessation of his relationship with his employer is free to pursue his own business or seek employment with someone else. However, during the subsistence of his employment, the employee may be compelled not to get engaged in any other work or not to divulge the business/trade secrets of his employer to others and, especially, the competitors. In such a case, a restraint order may be passed against an employee because Section 27 of the Indian Contract Act does not get attracted to such situation. It is also to be added that a trade secret is some protected and confidential information which the employee has acquired in the course of his employment and which should not reach others in the interest of the employer.”  

Apart from non-disclosure agreements, there are a few other measures that can be adopted by the business to protect their trade secret, for example creating a sense of responsibility and loyalty in the mind of employees, by investing in more safe databases and ensuring limited numbers of employees get access to the database, etc.

Conclusion:

An information is not trade secret if it is not confidential. The quality of the information, the relevance of the information for the growth of the business and measures taken by the owner to maintain the confidentiality, are some of the factors to be considered while determining whether an information qualifies as a trade secret or not.  Even though the Indian courts have played their part by facilitating the business to keep their trade secret protected through various decisions, it can’t be denied that there is a need for  statutory protection in India. 

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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