Basics of Trade Secret

Basics of Trade Secret

Traditional Knowledge (TK) as Intellectual Property or Indigenous cultural knowledge has always been an open treasure box for the unfettered appropriation of items of value to Western civilization. 

However, their usage is often subject to confusion. There have been various efforts to define the concepts of traditional Knowledge, indigenous Knowledge, and indigenous peoples, but there are so far no universally adopted definitions. Different persons define them differently depending on their intellectual persuasion and professional interest. And many often use the concept of traditional Knowledge interchangeably with that of indigenous Knowledge. 

Trade Secret

It provides two types of protection: 

Defensive protection
This aims to stop people who are not a part of the community from acquiring intellectual property rights over traditional knowledge. One of the excellent examples of defensive protections is India’s Traditional Knowledge Digital Library which is formed after collaboration between the Council of Scientific and Industrial Research (CSIR) and the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (Dept. of AYUSH), Ministry of Health & Family Welfare. 

Positive protection
This is the granting of rights that empower communities to use and benefit from their TK. 

Trade secret as defined in the Black’s Law Dictionary means: 

“A formula, process, device or other business information that is kept confidential to maintain an advantage over competitors; information including a formula, pattern, compilation, program, device, method, technique or process- that (1) derives independent economic value, actual or potential, from not generally knowing or readily ascertainable by other who can obtain economic from its disclosure or use, and (2) is subject of reasonable efforts, under the circumstances, to maintain its secrecy.” 

Article 39.2 of the Agreement on Trade-Related Intellectual Property Rights(TRIPs) which talks about the IP protection of Trade Secret, reads as follows: “Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information: 

a) Is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that usually deal with the kind of information in question; 

b) Has commercial value because it is secret; and 

c) Has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it confidential.” 

Combining the conditions enumerated in the TRIPs and what is being followed as a general trade secret law, it can be said that protection under this form of IPR is provided when the following conditions are satisfied: 

• Information has actual or potential economic value; 

• Reasonable steps have been undertaken to protect it; and 

• The defendant obtained the secret by violating an express/implied duty, or resorted to other “improper means.” 

Here, drawing a reference to the already cited requirements of a trade secret it is contended that generally, TK qualifies all the conditions mentioned above. TK has high economic value and can be used to develop products and processes which are profitable. Because of this financial worth, TK is generally considered as a business asset. As for the requirement of secrecy in the TK context, the courts look to a group’s local customary law and demeanour as evidence of efforts to constrain the diffusion of TK concerning outsiders. Also, for this purpose, the entire community is considered to be a single unit. Trade secrets can be specifically helpful in protection of secret or sacred TK. Customary laws of communities often require that specific Knowledge be disclosed only to particular recipients. Courts had awarded remedies for breach of confidence when such customary laws were V. Mountford, members of the Pitjantjara Council of Australia obtained an interlocutory injunction, based on breach of trust, to restrain the publication of a book entitled “Nomads of the Australian Desert.” The inhabitants argued that the book contained information that was revealed in confidence to anthropologist Dr Mountford, thirty-five years ago. Here the court held that there was an implied duty to maintain secrecy.

The law of confidentiality and trade secrets has been successfully used to protect non-disclosed TK, including secret and sacred TK. Courts may award remedies for breach of confidence when customary laws of secrecy are violated. Quite a few communities have come up with the idea of protecting their TK as a trade secret; an example may be Ecuador where various indigenous and local groups have participated in an experimental project to treat traditional Knowledge as a trade secret, in conjunction with the NGO Ecociencia. Even if a person reveals a secret to another under an obligation on that person not to disclose it, that does not amounts to a breach of secrecy. It is not lost even if it is known to the entire community, but those outside it do not have much knowledge about it. 

In case TK is protected under trade secrets, there is no requirement of the specific right holder, and the community is deemed to have a collective personality. TK is often conceptualized as a form of joint intellectual property. If the above conditions are satisfied and the Knowledge is then acquired either using bioprospecting or other illegal or deceptive means, this Knowledge can be protected under trade secrets. A trade secret is recognized as one of the best forms of IPR to protect TK. It protects the owner against disclosure or unauthorized use of Knowledge. It is undoubtedly better than other IPR protection because, under trade secrets, there is no general requirement of disclosing the information in the public domain after a certain period. Also even in the case, the trade secret has been sold to the other party under a licensing agreement, the general law that applies is that the licensee cannot exceed the purpose for which the Knowledge has been transferred to him. If he does, it would be a violation of the licensors right under the trade secret. Also, in case of a trade secret, the information is protected for perpetuity, there is no requirement of criteria like novelty, non- obviousness, etc. However, the absence of any specific trade secret legislation in India can be a severe detriment to this type of protection. Nevertheless, there are cases whereby the Indian courts have imported universal law principles for the protection of secret Knowledge.

Propagators of TK protection have been advocating for official recognition of TK within the international IPR regime. However, they have failed so far. In light of this, some other way has to be found to protect TK, a lot of people have resorted to human rights for protection. The authors here, like to put forward the point that the existing IPR regime can be used to protect TK and among the current IPRs Trade Secret is the most accepted form. It is therefore paramount that national legislation shall be expanded to include specific measures that would enable indigenous and local people to protect traditional knowledge and innovations by way of trade secrets. Such actions may consist of explicit conventional knowledge articulation as subject matter for protection through trade secrets. 

Current Situation about Traditional Knowledge 

Today the fact is that 85% to 90% of the basic livelihood needs of the world’s poor (more than half of the world’s population, including indigenous and local communities) are based on direct use of biological resources (and related traditional Knowledge) for food, medicine, shelter, transport, etc.; over 1.4 billion poor farmers rely on farm-saved seeds and local plant breeding techniques as their primary sources of seeds.
Most of ancient traditional Knowledge was not documented and managed correctly. Some of them come to be written down on different materials such as stones, copper plates, brick bark, palm leaves, and paper, but it has been obliterated few survived in time. Western societies also neither recognized any significant value in Traditional Knowledge nor any obligations associated with its use and have passively consented to or accelerated its loss through the destruction of the communities’ living environment and cultural values. Today’s, industrialization is the main factor for the loss of Traditional Knowledge. The modern cultural industries (printing, film, and record), as well as the manufacturing industries (textile, handicrafts, pharmaceutical, seed, etc.), commercially exploit the traditional knowledge products for using new technology, without the permission and sharing of profits with the communities. Scientists, researchers are used genetic resources and traditional knowledge for producing some new products, new medicine, and new crop varieties without their consent as well as unfairly exploited it and without compensation. 

In the past few years, several cases relating to traditional Knowledge have attracted international attention. Yoga, Neem, and turmeric are examples of the cases that can arise when patent protection is granted to inventions relating to traditional Knowledge which is already in the public domain. In these cases invalid patent granted because the US patent examiners were not aware of the relevant conventional Knowledge. Many discussions have been made on the subject of protecting traditional knowledge. WTO, Conference of parties at the convention on biological diversity, some national governments in these discussions have embraced the view that conventional Knowledge needs to secure legitimately. As a result of this, the issue of protection of traditional knowledge has been brought to the debate surrounding intellectual property rights and traditional Knowledge that has in the public domain has come into question. 

Protection of Traditional Knowledge 

The debates open on the inadequacy of intellectual property right in traditional Knowledge. The discussion has far shown this issue is very complex and controversial. Many scholars suggested that the protection of Traditional Knowledge within the prevailing regime intellectual property right. But this view that only moralistic because intellectual property law has the western impression that every person has a moral right to control the product of his or her labor or incentive to create. However, this has led to developing countries felt their traditional Knowledge has been the unauthorized appropriation of their Knowledge. Developed countries create commercial products by the use of traditional knowledge, natural resources of developing countries. Intellectual property rights to be obtained to the invention and creation based on existing traditional knowledge. 

That the setting up of an Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge, and Folklore by WIPO first met in April 2001. The document prepared by the WIPO Secretariat identified whether or not traditional knowledge holders can use the existing intellectual property law to their advantage. In this regard mainly three limitations meet.
The first Intellectual property system never facilitated the custodians of traditional Knowledge to enjoy and share the benefits derived from the new commercial exploitation of their knowledge base.
Secondly, the concept of ‘originality’, ‘novelty’, ‘utility’, ‘non-obvious or inventive step’ etc., used to find out the items that are to be protected through the Intellectual property system, addressed only the scientific developments based on the western science. Similarly the identity of the creator of the new Knowledge – author or inventor – also reflects the individual private property underlying the protection of intellectual property.
Thirdly Intellectual Property Right protect ideas, innovations, creativity and expressions. Thus, the concept of protection applied under Intellectual Property Rights is quite different from the ‘protection of Traditional Knowledge’. The security of Traditional Knowledge is the framework that encourages the preservation and conservation of traditional practices, culture, and Knowledge because it is a vital element of the cultural heritage of humanity. Although intellectual property rights derived from traditional Knowledge may be acquired legally, failure to recognize the contribution of the traditional knowledge holder and to share benefits and economic gains. 

Limitation of Trade Secret Protection 

Trade secrets protect undisclosed Knowledge through secrecy and access agreements. Traditional Knowledge that is maintained within a community could be considered a trade secret. But once the Knowledge is diffused to the public, this option no longer exists. A trade the secret is only enforceable as long as it remains a secret except in cases of “Breach of Today the fact is that 85% to 90% of the basic livelihood needs of the world’s poor (more than half of the world’s population, including indigenous and local communities) are based on direct use of biological resources (and related traditional Knowledge) for food, medicine, shelter, transport, etc.; over 1.4 billion poor farmers rely on farm-saved seeds and local plant breeding techniques as their primary sources of seeds. 

Trade secrets per se cannot be legally protected, as they are secrets; what will be enforceable are the consequential effects of breach of trust or legal contracts. It means that secrets diffusion to the public to compensate for the loss of secrecy. 

It is remembered that all traditional Knowledge is not said to be secret. Traditional Knowledge is a part of the Intellectual property transmitted from generation to generation. It is challenging to protect trade secrets against misappropriation due to a lack of legal entitlement to the bearer of the mystery. When applied to Knowledge belonging to a community, the community must make a reasonable effort to maintain the secrecy of Knowledge. If there is not a reasonable effort to keep the traditional Knowledge’s confidentiality, then trade secret protection does not apply to traditional Knowledge.  Despite its seemingly expansive range of protection, trade secret law cannot satisfactorily protect the Traditional Knowledge of indigenous peoples.
First, Knowledge must be confidential or secret for which protection is sought. It must not be public property or Knowledge. However, traditional Knowledge strongly believes in sharing Knowledge and considers it part of the public domain. The traditional community knowledge is passed on to generations and outsiders who subsequently publish it. It becomes difficult for the district to control secrecy because it falls into the public domain. Then it is no secret or protected by law, and it can be freely available to anyone. 

Second, the essential requirement is that the information is of economic value. It is difficult for traditional knowledge holders to prove the economic value because it holds sacred value only. 

Third, is that the information must be related to trade and industry. Traditional knowledge holders may not use Knowledge or information in business or industry. Fourthly, it has also been suggested that to be a trade secret the info must have an existence separate from its owner. It is difficult for the holder of traditional Knowledge because traditional Knowledge is an integral part of the lives of those who practice it daily and rituals. 

Finally, it provides remedies only once the secret has been disclosed. Traditional Knowledge is secret and sacred, and their very disclosure to inexperienced persons violates their sanctity. Over the above the difficulty involved in attempting to meet these specific requirements, it is not possible to protect traditional Knowledge by trade secret law. It is a limited and inadequate approach to protecting traditional Knowledge. 

Sui Generis System 

here is a strong recommendation to and has been advocated by many NGOs and academics that countries should invest in the alternative creation “Sui Generis Law” which is the development of intellectual property law, suitable to their cultural and natural resources and traditional knowledge. In 2002 WIPO prepared a paper focusing on the development of the Sui Generis system and in 2003 the WIPO General Assembly decided that IGC would focus on international recognition on this subject. 

Sui generis is a Latin word. It means “Unique” or “Special”, leaving the Sui Generis system open to interpretation. Sui Generis offers a unique type of intellectual property right, which is different from the classical IPR, as is the case with the patent. All Sui Generis models that could be tailored to the specific needs and circumstances of the members are legally recognized systems. It is understood that the particular requirements and events in each country vary. In this respect, the differences between the developing and the developed countries are extensive in several aspects. Therefore, it was evident that a Sui Generis system of protection appropriate for a developing country may require specific modifications in another developing country and these systems may not be even relevant to a developed country. 


India is a rich country of biodiversity and cultural resources, but the lack of a system to safeguard protected these resources in the globalized world. Many indigenous communities of India rely on traditional Knowledge for livelihood and identity; its misappropriation can severely prejudice their interest and rights. Biopiracy is a genuine threat, the need for the safety of India’s traditional knowledge. India has been several cases of bio-piracy of TK from India. First, it was the patent on wound-healing properties of Haldi (turmeric); now licenses have been obtained in other countries on hypoglycaemic properties of karela (bitter gourd), brinjal, etc. As a result of this, Mr. Shashi Tharoor had introduced a private bill in the parliament to protect traditional Knowledge on 10.03.2017 which was pending. The Bill does not restrict the use of conventional Knowledge, but it provides safeguards to custodians’ communities, protecting them from abuse and exploitation. Bill will protect India’s Traditional Knowledge from foreign appropriation and will provide an opportunity for Indians to learn about their culture and practices through a legal system. 

In view that trade secret as a part of general intellectual property law does not adequate measures for the protection of traditional knowledge and innovations of conventional and indigenous Knowledge. However, traditional Knowledge is not only secret but also scary Knowledge. Trade secrets do not meet a specific requirement to protect traditional knowledge. At present, Indigenous people do not have a secure institutional arrangement to safeguard their intellectual property and secret in modern economic space. It proposed that the establishment of the Sui Generis system to protect or cover traditional Knowledge. 

[email protected]
No Comments

Leave a Reply