New Delhi, Mar 6 (PTI) The Law Commission has recommended a legislation to protect trade secrets with a provision to protect whistle-blowers, asserting that law cannot permit use of non-disclosure agreements to discourage reporting on illegal activities.
In its report on ‘Trade Secrets and Economic Espionage’ submitted to the government on Tuesday, the law panel also said the issue of economic espionage should be dealt with separately through a different legislation.
In his covering letter to Law Minister Arjun Ram Meghwal, Law Commission Chairman Justice (retd) Ritu Raj Awasthi said the commission is of the considered view that a ‘sui generis’ (unique) legislation should be introduced to protect trade secrets with exceptions pertaining to whistle-blower protection, compulsory licensing and government use, and public interest.
The panel also shared a draft ‘The Protection of Trade Secrets Bill, 2024’.
“With regard to the issue of economic espionage, it is pertinent to note that it typicality involves a foreign State as a party, whereas commercial espionage is between two commercial entities.
“Therefore, the commission is of the considered opinion that the issue of economic espionage should be dealt with separately through a different legislation,” Justice Awasthi said.
According to the three-part report, the proposed law must codify the existing principles that have been established by the courts by way of judicial precedents.
With respect to the conceptual issue of whether trade secrets should be treated as “property” or not, the commission said it is of the considered view that “trade secrets” cannot have a “property-like” conception such as in the case of other intellectual property.
Referring to the definition of “trade secret”, the proposed law must provide a broad definition that allows rooms for judicial interpretation so that emerging aspects and industries may also fit within the framework of Indian law, it said.
The report said the legislation must allow for the exceptions so as to ensure a proper balance of competing interests.
“In this vein, the commission holds the view that the Act (proposed law) must incorporate a provision for protection of whistle-blowers.
“Illegal activities cannot be exempt from the purview of law in the garb of trade secrets. Law cannot permit use of non-disclosure agreements to discourage reporting on illegal activities,” it asserted.
In October 2017, the department of legal affairs and the legislative department of the Union law ministry had referred the issue to the Law Commission keeping in mind the complexities involved. PTI NAB NAB KSS KSS
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