The abject failure of the patent regime to protect intellectual assets (IA), makes it imperative to find a new tool to protect IA in various fields of technology. Shocking though it may sound, the patent regime has become a mere investment of considerable time and money in inefficient patent prosecution systems to obtain patents on technology going obsolete and, equally incredibly wasteful litigation before Courts that fail to even comprehend the technology in the patented / infringing technology. This means a waste of two very valuable resources i.e. time and money which could have been used to research, secure and promote new technologies in the competitive market.

This is especially true in ‘volatile’ fields of technology that are almost obsolete in about a year’s time and in cases where the market needs are accomplished with brilliant innovations that may not meet strict patentability criteria and the ubiquitous Section 3(d). One such IA protection tool is “trade secret” (TS). It has a good track record of successfully protecting a formula for over 100 years (read : Coca Cola).

Indeed before the advent of statutory IP protection regime, TS was being used by civilizations to protect their technology and retain an edge over competition, the art and craft being passed down generations through competent apprentices.

The rise of the statutory IP protection relegated TS to boardroom obscurity, reduced it to a mere boilerplate clause and ignored by IP Attorneys. Indeed, earlier this year, a Court in the normally IP savvy Delhi High Court ridiculed the defence of TS used by a Defendant in a suit for infringement of process patent.

TS is emerging as a potent tool to protect IA in ‘volatile’ fields of technology. As the term TS suggests, the technology must be secret or retained as confidential information. The three-pronged test followed in foreign courts to determine a TS is that the information purported to be TS must not be in public domain, it must give a competitive advantage in market and efforts must be made to continue to keep the information a secret. In short, all trade secrets are confidential information but vice-versa may not be true.

In the absence of a TS protection law in India, TS is sought to be protected through the common law of torts including misappropriation and unjust enrichment and in fortunate casesthrough breach of contract, if there are specific clauses protecting access and governing disclosure of TS in agreements, non-disclosure agreements, confidential agreements, employment agreements, contracts for service etc. which must in turn ensure that the provision does not contravene S. 27 of the Contract Act.

While this may work for the plaintiff who sues for misappropriation of TS, the same definition does not hold water as a defence against claims of infringement. It is now time to revamp and pass the National Innovation Bill 2008, or enact a fresh TS law.