A potential Trade Secrets Bill must contain protection for whistleblowers, recommended the Law Commission of India in a report released in March 2024. Titled “Trade Secrets and Economic Espionage,” the report outlined provisions for a proposed Trade Secrets Bill that would protect trade secrets against misappropriation and foster fair competition among businesses.
“Illegal activities cannot be exempt from the purview of law in the garb of trade secrets. Law cannot permit the use of non-disclosure agreements to discourage reporting on illegal activities,” said the report. It added that such agreements would be void under Section 23 of the Indian Contract Act, 1872, as they would go against the law and public policy.
“Even where a claim for protection of trade secrets is based on the principle of equity, and where disclosure is being made to bring to light an illegal activity or contravention of law, the principle that one who comes into equity must come with clean hands would prevent such a party from getting any relief against alleged misappropriation,” the report continued.
The principles of equity are a set of legal maxims that govern fairness in law and the granting of legal remedies. “One who comes into equity must come with clean hands” is a principle that states that a party seeking legal remedies must not have engaged in wrongdoing themselves.
Need for Safe Harbour Clause
The report also observed that even jurisdictions like the USA, whose intellectual property and trade secret laws go beyond the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), had whistleblower protections. The European Union (EU) also provides exceptions for revealing misconduct, wrongdoing, or illegal activity in the public interest. However, India does not have a comprehensive whistleblower protection law, as the Whistle Blowers Protection Act, 2014, only applies to allegations of corruption or misuse of power. The Commission suggested that the proposed Trade Secrets Act incorporate a similar safe harbour clause.
“The proposed provision must grant immunity to whistleblowers and not make it a mere defence, thereby saving them from protracted litigation that may discourage them from coming forward. However, the requirement of good faith and public interest may be added to ensure that such immunity is not abused for personal gains,” said the report.
Compulsory Licensing in Case of Emergencies
The Commission also recommended that the proposed Act contain provisions allowing for compulsory licensing and/or government use in exceptional circumstances involving national security or public health. Such provisions allow third parties to manufacture patented products, such as medicines or vaccines, even without the consent of the patent owner.
“However, such an exception needs to be tailored very narrowly and given a restrictive scope… Thus, such a provision…
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