Confidential information is very important in certain businesses to establish competitive advantage and dominance of the firm in an industry. For ex: coke’s formula is a well-guarded secret for years. No law can give full-proof protection for confidential information/ trade secrets because once the genie is out of the bottle, it becomes public knowledge. However, there are processes put in place to minimize that harm.
TRIPS agreement ensured that participatory nations are under obligation to protect undisclosed information to protect business interests. But TRIPS can be interpreted liberally or strictly bringing home the argument that strong or weak protection of a trade secret depends upon the legal environment one is a part of.
In strong legal environments like US, trade secrets are protected by “The Uniform Trade Secrets Act” that protects any formula, pattern, method or process that has ‘independent economic value’ from being a secret. In weak legal environment like India, trade secrets and confidential information is enforced through contracts. Given the weak adherence of contracts in countries like India/ China, it becomes important for managers to be aware of the legal conditions existing in the country and be cognizant of the extra measures required to protect trade secrets. In weak legal environment, more steps need to be taken and firms need to be cautious about hiring the right kind of people and maintaining secrecy. Right kind of the people is the key, but what do we understand by right kind of people the loyalist or star performer? I leave up to our judgment to find answer to this question.
Dr. Malay R. Patel, Associate Professor, Unitedworld School of Law (UWSL)
Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.