Indian industry associations advocated for a new Trade Secrets Bill, revealed a March 2024 report from the Law Commission of India. Titled “Trade Secrets and Economic Espionage”, the report outlined provisions for a proposed bill that would protect trade secrets against misappropriation, and foster fair competition among businesses.
Submission From ASSOCHAM:
The Associated Chambers of Commerce & Industry of India (ASSOCHAM) asserted that a separate codified law to protect trade secrets is required. The organisation argued that the lack of a codified law hampered the growth of businesses, and that recourse to common law and torts was tedious and difficult in the case of trade secrets spilling out.
It remarked that existing contract law remedies proved insufficient, as liability only arose where contracts existed, leaving tort law as the sole recourse. This creates the following critical problems:
- Conceptually, judges have to independently assess reasonable caution without statutory guidance
- And while High Courts (HCs) recognise equity, they require considerable time to decide on cases sans legislative direction
- Further down the ladder, lower courts demand statutory foundations, which in turn raises enforcement concerns
Elsewhere, the delegation from ASSOCHAM pointed out that there was no single law that governed protection of trade secrets. For context, contract law governed only limited aspects, while the Information Technology Act (IT Act) covered solely computer-related harm, even though trade secrets extend beyond digital domains.
Consequently, the trade association suggested that the government should enact a codified law promising disposal of cases within a specific time frame in order to instil confidence in the industry and investors.
Furthermore, the association stressed the need for protections against economic espionage.
“The repercussions in case of economic espionage are significant: for instance if a country’s nuclear programme is attacked fines will serve no purpose. [Also] artificial intelligence and machine learning are in their infancy and there are no counter measures to protect us. [Importantly] cyberattacks are more common when it comes to economic espionage.
“While the Information Technology Act may provide relief to protect trade secrets, we need infrastructure to address economic espionage, as it is broader than industrial espionage and a separate law is required,” said the report.
Submission From The Confederation of Indian Industry (CII):
The Confederation of Indian Industry (CII) presented its findings before the Commission, supported by an industry survey that revealed widespread concerns and demands for legislative reform.
CII said that the industry has sought a separate trade secrets law since the 2000s, driven by the reality that trade secrets covered a substantial percentage of new technology, making inadequate protection a direct economic…
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