TRADE SECRET LAW (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     14th March 2024        

Context: The Law Commission has suggested introduction of a new “trade secrets” law to buttress the protection for firms and businssses.

Trade Secret Law

Law Commission Of India

  • About: It is an executive body established by an order of govt of India.
  • It  ensure that the laws formed are just and fair which work towards its proper implementation.
  • It works as: An advisory body to the Ministry of Law and Justice. 
  • It is not defined under the Indian Constitution but It is constituted as part of Article 39A.
  • Tenure: Generally law Commission is Constituted for a term of 3 year but Govt can extend the same.


  • About: Under the proposed law, holders of trade secrets gain legal recourse against misappropriation and disclosure.
  • Aim: To strengthen safeguards for companies against third-party misappropriation of confidential information by expanding the scope of protected domains beyond existing categories such as copyright, patents, and other forms of intellectual property.
  • Criteria for Determining Trade Secrets: The commission recommends adopting the TRIPS Agreement's criteria of secrecy, commercial value, and reasonable steps for defining trade secrets.
  • Role of TRIPS Agreement: It serves as a comprehensive framework for intellectual property rights, fostering global trade and resolving disputes.
  • Scope of TRIPS Agreement: TRIPS covers various aspects of intellectual property, including copyrights, patents, trademarks, and undisclosed information.

Law Commission's recommendation

  • The Law Commission advocates for a separate legislation to address economic espionage distinct from commercial espionage.
  • Legal Remedies for Misappropriation: The proposed law grants remedies such as damages, surrender, destruction of materials containing trade secrets, and recall of products based on misappropriated information.
  • Exemptions from Misappropriation: Certain actions, like disclosure for exposing unlawful acts or protecting public interest, are not considered misappropriation, along with provisions for compulsory licensing.