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Parts of a statutory law on trade secrets proposed in a draft bill by an Indian ministry have been described as "absolutely absurd" by an IP lawyer in the country

Managing Intellectual Property Parts of a statutory law on trade secrets proposed in a draft bill by an Indian ministry have been described as "absolutely absurd" by an IP lawyer in the country The proposals are part of a draft National Innovation Act drafted by the Federation of Indian Chambers of Commerce and Industry and released by the Ministry of Science and Technology last week. The Act is designed to "facilitate public, private or public private partnership initiatives for building an innovation support system ... and consolidate the law of confidentiality in aid of protecting confidential information, trade secrets and innovation". Chapter VI deals with trade secrets and creates an obligation to preserve confidentiality. But Pavin Anand, a partner of Anand & Anand, objects to section 11(c), which gives an exception to the offence of breaching trade secrets "where disclosure of the confidential information is held to be in public interest by a court of law" because the term "public interest" is too vague. Section 12 (4) is also controversial. This says that an injunction restraining use of confidential information "may stipulate conditions for future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited". Anand said the proposed exceptions from infringement "introduce a compulsory licence in trade secrets". As an example, he said that these provisions would make it possible for someone to steal the recipe for making Coca-Cola and to manufacture a drink using this recipe at a cheaper price, while paying a 10% royalty fee. But Manisha Singh-Nair, a partner of Lex Orbis, said that the way the courts apply common law to protect trade secrets had been inconsistent and that a statutory law was "not only a good idea but a necessity". Singh-Nair welcomed other parts of the draft Act, including the provision compelling the Ministry of Science and Technology to present an annual national integrated science and technology plan to the government, tax and fiscal incentives for innovation and the creation of designated special economic zones for innovation. But she admitted that the bill is still vague: "The area of concern would remain whether the provisions are in the nature of policy statement or are mandatory provisions with in-built enforceability." The draft bill is now open for comments.

Full post as published by The Trade Secrets Vault on October 22, 2008 (boomark / email).