 The facets of the litigating trade practices and confidential information is quite enduring and not only for the professional, but even in the other aspects in day-to-day affairs, these are important issues to be discussed. Therefore, when we are connected with Mr. Ashok Venkateshmurthy, he was ready to share his knowledge on this aspect. In fact, when we shared on the social media yesterday, a lot of people said that it's quite interesting and the issue which is niche, we expect that people will watch it later on also since we are live today on YouTube. Without taking much time, I request Mr. Ashok to take things forward. Thank you, Mr. Vikas. Can I get the permission to share my screen, please? Can everyone see the PowerPoint presentation in front of them? The subject that I will be touching upon today is litigating trade secrets and confidential information. Among all the classes of intellectual property litigation, trade secrets and confidential information are very unique in terms of the challenges that come with them, especially in a country like India which does not have a specific law dealing with trade secrets and confidential information. Oftentimes, we rely upon a combination of the law of confidence coupled with the law of contracts whenever there is a non-disclosure agreement involved. And then we piece together the jurisprudence based on several general laws that are already relevant and applicable. So obviously, this has its own challenges, it has its own limitations and we've also seen sometimes even courts struggling to understand what's the best way to decide a controversy involving the misappropriation of trade secrets. So hopefully with today's conversation, we will be able to answer some of those questions. At the outset, you'll also have to forgive me for my voice because I'm just recovering from a viral fever, so I have a sore throat which is preventing me from speaking louder. Okay. So what we will cover today, we will go into the very basic aspects of what are trade secrets and confidential information. We will definitely touch upon how do you put together a pleading when you have to litigate a trade secret or a confidential information action? How is the plane supposed to be drafted? What are the kind of do's and don'ts? What are the subjects to be covered? Same thing with the written statement. How do you really tackle the issue of a confidential information action during trial? And of course, some basic concluding recommendations that hopefully we'll be able to take back with you as practice notes. Okay. So let's first understand what trade secrets and confidential information are. Okay. And if any of you enjoy good food, if you travel across our country, you will come across hundreds of restaurants across highways, in cities that claim to serve the best available local biryani. And if you were to strike up a conversation with the chef through what is it that really goes into making the biryani as good, she or he will likely come back and say that, look, some basic ingredients like rice and cloves and cinnamon I can tell you, but there is a certain masala that I have come up with which is unique only to me. I will not tell you what it is. It is my closely guarded trade secret. And virtually this is common across the country, across the world, across different industries and sectors. So for example, there's a very famous brand in the United States which is a baking brand. It's called Cinnabon. And Cinnabon is known for its cinnamon rolls and the kind of cinnamon that they use in those rolls is considered a closely guarded trade secret. Same thing with the self-driving technology which Google and Uber fought very bitterly over. Some of the proprietary technologies involved in the self-driving platform was closely guarded as state secrets. The search engine algorithm of Google is another example of IP or intellectual property protected as a trade secret or confidential information, Coca Cola, which is also with through the test of time as both trade secret and confidential information. So you will see that trade secrets and confidential information are not limited to one sector such as technology. It is ubiquitous. It spreads across different industries. It is relevant across geographies and across time periods. So now coming to some of the legal definitions of what is a trade secret. So like every other lawyer returned to the Blackboard Dictionary for a definition. So there is a distinction to be made between confidential information and trade secret. The term confidential information is a more umbrella term. The term trade secret kind of falls somewhere within the range of what qualifies as a confidential information. So what is confidential information? Very simply put, it's something that I know as the owner of a business and nobody else knows it. And because of that, I have certain advantage it gives to me. So there's a very interesting reference in the book, Sapiens, where they talk about how the first village enterprises were formed and they mentioned that it was on the basis of exchange of information that people realized who to trust and who not to trust. And therefore they came together and formed enterprises based on how much of information is made available. So trade secrets and confidential information in that sense are inherently challenging because to essentially run a business and to successfully conduct trade, engagement with stakeholders outside of the business and people within the business is inevitable, which acts as a threat to your trade secret. But without that, you also don't have a business to capitalize on on the strength of your trade secrets. So somewhere the challenges around confidential information becomes very clear when you realize that trust is the foundation of every business. But with trust also comes the question as to who to trust. And this is very central to the concept of confidential information or trade secret. Because the moment you enter into an agreement to divulge confidential information, there is a certain degree of assumption that because there is a fiduciary relationship, that's the reason why you are actually disclosing confidential information. But I know which the world does not know, which gives me some kind of advantage. We actually now venture into things like, is it a formula? Is it a process? Is it a device? Or say information about my customers or the price at which I actually sell my product? So is that confidential? If yes, probably qualifies as trade secret subject to the other conditions, which is that I have spent some cost time and effort in developing it. It has economic value. It is not generally known to others. It is not readily attainable. And is the subject matter of my efforts to protect the confidentiality of so it's not sufficient for me to say that this is a secret. I also have to take some steps to keep it a secret. I always go back to a very simple example. If we have precious, you know, stones or gold jewelry in the house, we will obviously take some steps such as opening up a locker, putting it inside, setting up a court so that nobody else has access to it. But if I leave an obviously gold-looking article on the doorstep of my house, chances are that the outside world is going to assume that it is not valuable because I've just not taken enough precautions to guard it. And this analogy, as crude as it is, is very relevant to our understanding of what qualifies as a trade secret and what qualifies as confidential information. Any questions so far? Can I move on to the next slide? Okay. So now we did see some of the definitions of what qualifies as confidential information and trade secrets. But how it is determined in the facts of each case is essentially based on an analysis of the six factors in front of you. This is a judgment of the Bombay High Court in Bombay Dime Company versus Mahir Karan Singh. It's a 2010 judgment, which very succinctly summarizes what the considerations are while determining whether something is actually a trade secret or not. So the first thing is that the court will ascertain whether the information that is called confidential information, to what extent is it known outside the business? How many people outside of the business happen to know it? And how many of them know it without any encumbrances as to confidentiality? Two, what are the steps you have taken to silo the information within the organization? For all you know, you could have in a 10,000 employees. But if all 10,000 employees know the specific code you're developing, chances of leakage is very high. On the other hand, if you have limited information to probably the top 20 people in your research and development team versus the entire 10,000, then the extent of people within the organization who know it are obviously very, very small. What precautions have you taken to guard the trade secret? Do you have a trade secret policy? Do you have a confidential information policy in place? Does the security guard check for personal storage devices before allowing a person inside? Are there steps taken to ensure that the systems in the office are password protected so that you know exactly who is accessing which computer for what purposes? Do you have the systems in place to lock the activity of the users within the organization? Do you have the data available? Do you have CCTV cameras? Do you have access control? So the more effort you have taken to protect the confidentiality of information and to attribute the leakage to a particular source, chances are that you're in a better position to protect and confidential information. But suppose I don't take any of this precautions, my employees come with their own laptops. They can carry personal storage devices. They use their own personal emails to transact with company information. Then for me to argue that the information that I'm seeking to protect is confidential becomes that much more difficult. Last but not the least, the amount of time, effort and money that has been spent in developing the information. This is obviously not easy, especially if the information is intangible. But for example, if there are say 10,000 employees working together to develop a self driving car technology, the salary is being paid to all of them as the cost of development. Again, a very crude analogy but an appropriate one. Same thing with the last factor, which is the amount of time and expense it would take for others to acquire and duplicate the information. So we were dealing with an engineering product which reduced friction in the energy industry, which reduces fire hazards and increases the yield. And because we had developed that product with using certain materials, having a certain design, we felt it was confidential, which gave us a huge competitive advantage in the market. But if somebody else had to duplicate this process, it would probably take them maybe five to seven years and probably crores of rupees. And that is one of the benchmarks based on which the courts will decide what is confidential information and not. So any time there is a claim to enforce confidential information or defend a claim of confidential information being breached, these are the factors against which the claim will have to be invariably tested. I hope it's clear so far. Any questions? Okay. We did the question at the end of the session. Perfect. All right. Okay. So now let's go back to the fundamental question of what is the business case around confidential information? Why do businesses even look at it as a form of intellectual property protection, especially for technology like self-driving car technology? You sometimes have better alternatives like patents, which gives you a monopoly for almost 20 years and no questions are as easy to enforce. But there are certain unique advantages that trade secrets represent, which probably other forms of conventional IP protection do not. So first thing, when you register a patent or a copyright, you are obviously limited by the geographical boundaries in the country where you have registered your patent or your copyright. Right? Of course, copyright has certain international protection in the form of the burn convention, but patents are usually country-specific protections granted. So trade secrets are, on the other hand, not confined by boundaries. Coca-Cola is a classic example. You will see them being successful across the world simply because the recipe continues to be a secret. So there is a certain advantage of being able to achieve worldwide protection without spending the time, effort, and money for something like patent protection. Two of unlike patents with come with an expiry date of say 20 years, not considering the time of renewal, our trade secrets are valuable as long as they're a secret. So the longer you keep it a secret, the more valuable it remains. It does not have an expiry date. Thirdly and very importantly, there is no necessity of public disclosure. So if you look at a patent, if you have to get patent protection, some level of disclosure as regards the subject matter of the invention is inevitable. You have to make the disclosure to be able to get the patent protection in return. But unlike patents, trade secrets and confidential information do not require that kind of public disclosure. In fact, its value is derived from how secretive it is and how the public knows nothing about it. And last but not the least, especially in the context of the Viryani example that we took, the longer you maintain the trade secret, the more relevant you are as the entrepreneur. So it's not difficult for somebody to go ahead and start a restaurant themselves. But as long as only you know the unique mixture of masalas that go into a particular recipe, chances are that the business is dependent on you and it can't be done without you. So tomorrow, ensuring that franchises don't hive off their own businesses, they don't start a competing brand, all that becomes more very, very easy if you actually have guarded some of these recipes as closely guarded trade secrets. A classic example is Kentucky Fried Chicken. Colonel's recipe continues to be a trade secret and you can see how much the fact remains that without the support of the parent KFC in the US, replicating the same fried chicken is very difficult. So these are some of the advantages that come with trade secrets, which is the value proposition that we will have to explain to the court if we actually decide to litigate on them. Now on the other hand, the concept of trade secret also comes with certain inherent limitations. So for example, the value of a trade secret lies in its secrecy. The moment the secrecy is lost, the value is lost. And you don't look at the number of breaches of confidential information to determine loss of value. So far as law is concerned, even if there is one disclosure without an income wrench of confidentiality around it, chances are that the value of the confidentiality is completely and irreversibly lost. So the trade secret of confidential information is only as valuable as your ability to keep it a secret. There are no specific legislations in India, which arguably makes the process of enforcement a little challenging. Last but not the least, how do you scale a business if everything is going to be held very close to your chest? So scalability becomes a challenge when trade secret is the central star of your IP strategy. And also the question of what happens beyond your lifetime. A lot of residents have actually crashed and collapsed only because the chef actually took the recipe with him when he died. And nobody else was there to kind of take it forward. So these are the challenges that come with it. And every business then defines an IP strategy with trade secrets, which best suits its context, and which best reflect some of these nuances that we discussed. So now we come to how do you describe a trade secret in a plaintiff? So in the CMI Center's judgment, it's a foreign judgment, of course, one of the ingredients that a plaintiff has to satisfy to be able to sustain an action for trade secret enforcement is that he has to set out what information he's relying upon for the purposes of his action before the court. This was quoted with approval in the Z-telefilm case, both of which the citations are in front of you. But this is uniquely challenging because the moment I set out my trade secret in detail in my plaint and I file it in court, because the court record is a matter of public record, I have myself compromised the confidentiality by describing the trade secret in too much detail in my plaint and then causing it to be entered into a matter of public record. This is a problem because then the very purpose of which you're going to court, which is to protect confidentiality, you are compromising it by going to court and filing a lawsuit. So obviously that can't be permitted because the moment you enter the secret into a public domain, there is loss of secrecy. And as we already discussed, loss of secrecy represents loss of value. Now the other difficulty is, let's assume we don't mention the trade secret in too much detail at all. We keep it very vague and we say that we are here to enforce confidential information, but we don't tell the court what it is in our plaint. Then also there is a problem because the defendant is then unaware as to what is it, what is the specific allegation he's defending. So for example, if the non-disclosure agreement contains the definition of confidential information and it covers trade secrets, it covers processes, formulas, customer information, pricing information, business strategies, et cetera, et cetera, et cetera. And the plaint alleges that there is breach of confidentiality by the defendant. The defendant does not know whether he's being accused of reaching confidentiality of a formula, of a technical information or a business information. He does not even have the means to verify whether he has in his custody what the plaintiff alleges is confidential information or a trade secret. Like for example, he can go back and say, okay, I have the formula, but not the pricing information. But for me to be able to make that assessment as a defendant, I need some details as to what is the information that the plaintiff alleges is confidential. The next challenge is let's assume that on the basis of a very vague plaint and description of a trade secret, the court grants an injunctive order, whether temporary or permanent in nature. And we go ahead and we decide to enforce that injunction. So we land up at the premises of the defendant and decide to stop him from using his laptop, which contains confidential information, but turns out that the one part of the confidential information that he's talking about, which is say customer information, it is listed on the plaintiff's website and therefore is not confidential information at all. So how does the court then decide whether to execute its own order or not? Because it does not know whether what is confidential is technical information or business information, pricing information, customer information, or is it a formula? Is it any kind of invention? The court is not in a position to determine whether the defendant has actually, these are the challenges that come with making the plaint either too vague or too specific. Now the difficulty here is what is the right way to strike a balance between giving out too much detail and giving out too little detail. So the answer to this came in a judgment of the California Court of Appeals in 1968. The court laid down a standard, it's a judgment of the California Court of Appeals. It laid down the standard that the complainant should describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge. So the standard that the US courts employed, which is sufficient particularity, is the benchmark for deciding between the two extremes, too much detail and too little detail. Now the next question that arises to my mind is what is a plaint which has sufficient particularity of the trade secret? Because it's very easy to say that you describe your trade secret with sufficient particularity, but what does that translate to? So there are some practical notes that you can keep in mind to essentially achieve sufficient particularity of the description of the trade secret in your plaint. So the first thing that you look at is that you describe what the trade secret does, but refrain from describing how it does it. So going back to the example of the engineering product that reduced friction, reduced fire hazards and improved the yield on a particular royal and natural gas extraction exercise, what we described in the plaint was that it's an engineering product. It is in a position to ensure that the friction while extracting oil and natural gas is reduced. It reduces fire hazards and it increases the speed and efficiency with which oil and natural gas is extracted. So this is the trade secret. It's an invention that allows us to do all of this. Now how it does it is because of the materials used, the design employed and a variety of other factors that was not described in the plaint. So now the defendant knows that what they're talking about is this particular invention, which is used in oil and natural gas extraction, which serves this purpose and which is able to provide this utility. But the defendant or the court or anybody looking at my plaint will not know what is the design of the product or the materials employed in the product that enables the product to do what it does. So this is one way in which you achieve sufficient particularity without actually compromising the secrecy of the trade secret and without making it too vague in your client. The next thing is that you undertake an exercise of abstraction of the trade secret. So you provide the broad details of what the trade secret does, the name of the product, the name of the invention or the heading category of the trade secret involved, business information, pricing information, customer information, but you refrain from disclosing the nuts and bolts of the trade secret. So if you're describing customer information as your trade secret, you don't annexure to the plaint which sets out the names of the customers and the contact information. So you abstract it. So the court and the defendant knows this is the broad category of the trade secret involved, but it still does not go into the nitty gritty or the nuts and bolts of what the trade secret is so as to compromise the confidentiality of it. So once you have achieved this broad description of the trade secret, you also then describe a trade secret by virtue of the description of the processes employed to guard the trade secret. Because as I was telling you the assumption in Lawyers that you've taken measures to protect something, then it must be valuable and it must be a trade secret. So for example, you set out the measures you have taken to limit access control. In your plaint, you set out, for example, what kind of technology you have employed for limiting accesses to different parts of the office, who has access to the computer systems and servers containing the vital piece of information, how have you prevented other people from doing it, what steps have you taken to trace the person who is having access to a trade secret. You have biometric security, for example. So these are some things that you described as the measures taken to guard the trade secret. You mentioned the cost of development. You obviously specify how much time, effort and money that's gone into developing the trade secret. And lastly, you define the competitive advantages that it has provided to you. So you mentioned in your plaint, for example, that because your invention has a particular, you know, secretive component to it, you are able to sell the product at a premium because of which your profits have increased. You make references to all the awards and accolades you have received as a result of your invention. Without, at all times, wearing in mind that you never disclose the specifics and the nuts and bolts of the invention. So we talked about how you set out your governments in the plane while litigating a trade secret or confidential information. The next leg of the challenge comes in defining your remedies for the alleged breach of trade secret or confidential information. Now losses, of course, are usually defined and awarded in Indian courts by virtue of what is compensatory in nature. You essentially want to compensate the plaintiff for the losses he may incur. But the challenge with trade secrets and confidential information is that ascertaining the value of the trade secret or confidential information is very, very difficult. So with patents, for example, one of the common methods employed is what you call as market comparables. You look at similar patterns in the market and see what is the price of the value that are commanded. And then you say your patent also must be which are publicly available information. My entire value of the trade secret depends on the fact that I keep it to myself and nobody else knows what it is. So how do you compare one trade secret with another? It's obviously a very, very challenging exercise and not easy to undertake. So you obviously then look at other valuation methods of cost-based approach, discounted cash flow method, revenue-based approach. And then you arrive at a valuation of the trade secret and you go back to the court and then you say this is the value of my trade secret. And this is the anticipated loss of business advantage for the next two or three years that I incurred because of the defendant's actions and therefore you compensate me for the losses that I'm likely to incur. And when you look at what is the time period for which the anticipated loss of business advantage must be translated into an order of damages, you essentially look at what it would take for the defendant without access to the trade secret or the confidential information. What would it take and how much time it would take for them to develop this product on their own? So it may take two years or three years in the opinion of an expert and then you say for those two or three years that the defendant has managed to avoid that much of effort, we will ensure a corresponding compensation is awarded to the plaintiff. Now obviously this is not easy to achieve and more often than not you employ the services of a valuation professional. You do have damages, experts in damages valuation, you get one of them involved, they will be able to then sit with your client, understand the schematics of the business case around the confidential information and they will then come forward as expert witnesses either before a court or if it's an NDA with an arbitration clause before the arbitral forum and then deposes expert witnesses. And this more often than not is perhaps the easiest approach to achieving valuation of the compensation. The other way of looking at it is of course defendant's unjust enrichment. If I spent 100 rupees to develop a trade secret which is getting me 200 rupees in terms of gross revenues, the advantage I have secured is only worth 100, 100 being the cost of development, 100 being the margin. Now if the defendant copies my trade secret and misappropriates it and is able to earn 200 rupees, he's doing it without spending that 100 rupees that I have which means his enrichment is to the extent of 200 rupees in entirety. So then you arrive at what is that unjust enrichment that the defendant has achieved as a result of misappropriating the trade secret and you frame your prayer for relief on the basis of that analysis of unjust enrichment. Again, this is a place where a valuation professional can probably assist. But bear in mind that more than damages in the context of trade secret or confidential information actions, what matters is your injunctive relief. You want these secrecy of the information to be preserved. So you want an order restraining the defendant from disclosing the confidential information, misappropriating it, misusing it, so on and so forth. And that is why it's very important to identify your trade secret with sufficient particularity because otherwise holding the defendant accountable to the order becomes very difficult. And we will deal with another pitfall around combining your prayer for damages with your prayer for injunctive relief a little later. But the bottom line is that this is not a prayer that you want to frame in a very casual manner. You want to apply your mind, you want to take that time effort. You have to sit with your clients here for you have to sit with your clients accountants and essentially come up with the numbers. Without that effort, it becomes very difficult to justify the claim for computation of damages. Okay. Now, coming from the defendant's point of view, if you're putting together a written statement that challenges the plaint, you obviously take the defense that Am I audible now? Okay. So from a defendant's point of view, if your first instinct is obviously to take a defense in the negative saying that I had no access or custody of the confidential information. So I don't know what, what misappropriation they're talking about. But there's also an objection by way of demirer that you can take, which is to argue that, yes, I do everything that the plaintiff says is correct in terms of access or custody. But please note that because the confidential information that the plaintiff claims is in the public different, you know, domain because of no fault of mine, the information that he's claiming is confidential cannot be protected by order of the court. Right. There's a difference between a trade secret and a protectable trade secret. If I as a plaintiff haven't taken sufficient steps on the trade secret has leaked into public domain, I can't then come back and say, please stop the defendant from using this confidential information. So that is a defense that you can take to say that, yes, this is plaintiff's information. They have spent the time, effort and energy. I had access to it. But because the by law, it is not confidential information, I'm under no obligation to protect it. Now, with intangible assets, it is common for the plaintiff to combine a prayer for damages with a prayer for injunction. And it is usually sustainable. But the moment your effort to enforce trade secret is also in the form of a contractual action for an NDA or a non-disclosure agreement. Chances are that either the NDA exists as a standalone agreement or confidentiality clauses are part of the business agreement that you have executed. Now, if the very same agreement also contains a liquidated damages clause, which says in the event of a breach of the agreement, the party agreed by the breach is entitled to a sum of rupees so and so as liquidated damages. And there's a further stipulation that these constitutes a genuine pre-estimate of damages. Then you have yourself admitted by virtue of the contract that your grievance is capable of being remedied by damages and you don't need an injunction therefore. Now, this was specifically the case with the judgment of the Bombay High Court in the case of Salim Khan, if I'm not mistaken. And the court specifically went on to observe that the contract in question contained liquidated damages clause. And therefore, there was no crown for granting an injunction because the damage was capable of being remedied by way of money. So somewhere while drafting agreements also people have to be very careful to ensure that the liquidated damages clause does not come in the way of an injunction for an intangible asset. Of course, the Salim Khan judgment was in the context of copyright, not trade. Sorry about that. Seems to be some technical glitch for some reason. Okay, so what I was saying was that you could argue that the plaintiff has not taken sufficient steps to guard the secrecy of the information. You could establish that by showing, for example, that the employees were allowed to bring their own laptops and work on the plaintiff's business with their own laptops. You could argue, for example, that the employees were routinely permitted to take work or confidential information in the personal storage devices. You could argue that there was no access control. You could argue that the computer systems provided had no password or as it happened in one of the cases that I was dealing with, the password and the username was written on the table next to each computer, which kind of defeats the whole purpose of a password to begin with. So you could show that there was no sufficient measures taken to preserve the confidentiality of the information as one of the defenses. And therefore argue that what the plaintiff claims to be a trade secret is not a trade secret. You will definitely want to take the stand that the plaintiff's vague and lack sufficient particularity, especially if the plaintiff is actually vague. I was representing a defendant in a matter where I could not ascertain from the contents of the plaint whether what is sought to be enforced is a software, whether it is business information, such as customer information or whether it was pricing information. And as the Bombay Dying judgment itself will demonstrate, the ease with which technical confidential information is enforced is much more liberal compared to enforcing, say pricing information or customer information. Courts have been very hesitant to say that customer information is actually confidential and you can't use it. So sometimes you have to be very particular in your plaint as to what you're trying to protect different classifications of trade secrets because each classification of trade secret is then judged on a different benchmark. So usually easier to enforce technical trade secrets versus business trade secrets. So that's one of the arguments you could take. The last defense, residual rights is actually very interesting. Again, residuals don't have a statutory definition, but in common parlance, if I can best show this, let's assume that we worked in a particular office for a very long period of time and while interacting with one particular client over and over again, without the use of a phone or an external storage device, in my unaided memory, I'm able to retain the name of the client, the mobile number of the client and the email of the client. Now, this is a form of residuals where unaided memory has permitted me to retain some information without the need for external devices. The other example is let's go back to an artificial intelligence tool that is able to review contracts. Now, every AI tool, as it undertakes more and more assignments, it probably becomes more accurate and becomes faster in what it does and the outcomes are also probably a lot more useful than before. Now, obviously this continuous improvement is in the form of algorithms, is in the form of coding, so on and so forth, very easy to ascertain and then determine who owns it. But you take away the AI and you bring in a human in the place of the AI. As lawyers, when we reviewed a contract in the beginning of our career, we probably took maybe an hour and we had probably a 50% accuracy, but probably five years down the line, we're able to review the same agreement with maybe 20 minutes of time with 100% accuracy. Now, this improvement in what I do, the skills I have acquired is because of, is mine. I can't surrender it even if I want to because you can't separate me from the improvement in knowledge, from the improvement in the speed, in the improvement in the efficiency. Now, in the context of confidential information, you could have raw information like, for example, the schematics of an engineering product. But while working on that engineering product, you have acquired so much of experience, tomorrow you may go out and you may be able to develop a engineering product which is much better than what you were doing for your previous employer. Now, this is independent IP, which you have used your own skill labor and effort to do for the next person. Establishing how much of that new IP is the same as the old confidential information of your earlier employer becomes very difficult. And courts can sometimes lean in favor of the employee saying that it's your IP, it's your skill set, you're allowed to become a better professional. So therefore we won't encumber you on the grounds of your previous employer's confidential information or trade secrets. Of course, it is a matter of fact, it is a subjective exercise of inquiry. In the Google versus Uber case, I think one of the employees was found guilty of taking forward some confidential information. But bottom line is that's one of the defenses you could take that what they say is confidential information is actually residual, it belongs to me. So these are broadly some of the defenses that you could take. Now, coming to the question of trial, obviously the same problem statement continues. From a defendant's point of view, he doesn't know what confidentiality the plaintiff is talking about. From the plaintiff's point of view, he does not want to present the confidential information in the court as evidence because then you are compromising confidentiality, especially for example, if you're presenting things like engineering design. Now, courts have found several ways of addressing this kind of a dilemma. One way of addressing the dilemma is to say that look, if you have to compare a confidential information, and there was actually a recent judgment of the Bombay High Court whose name I'm not able to recollect, but what was sought to be protected, what they sought to protect as technical information is identical to a patent already in public domain and therefore cannot be protected as confidential information. Now, to make the comparison as to whether or not the plaintiff's confidential information was identical to the patent design, the court asked the plaintiff to submit the court held that the plaintiff ought to have submitted the engineering design in a sealed envelope, which could then be compared with the patent and you could arrive at a conclusion as to whether it is similar or not. So sealed envelopes is one way of doing it, but my personal assessment is that it still does not address the full range of concerns that the plaintiff could have or the defendant could have because the judge in all likelihood is not persons killed in the art, so he may not be able to make the assessment or the comparison the way a person's killed in engineering would be able to do. So you would want experts to come in and weigh in on the technical schematics, but then again you have a problem of confidentiality. What if the technical expert appointed by court ends up misappropriating it? So to address this, the courts have come up with something called as confidentiality clubs. This is essentially an order of a court setting up a packed or a confidentiality agreement between the parties which will identify what the obligations are, the protocols for exchanging confidential information during the process of trial, who can have access to it, whether the parties get to have access to it, whether the councils get to have access to it, whether they both get to have access to it and essentially the entire confidentiality terms are set on by the order of the court. Now what it does is it takes the entire evidence on the record outside of being a public record certified copies of which can be applied by anybody and it brings it within the realm of a certain pact of confidentiality endorsed by the court. Now the additional advantage with this is any violation of this order, first of all you violated the terms of confidentiality for which separate consequences follow, but you also violated an order of the court for which you could be pulled up for willful disobedience, contempt, so on and so forth. So confidentiality clubs or externalized only clubs, these are various verbitations and combinations that I've evolved in recent times, but they have proved to be quite useful in terms of conducting a trial involving trade secrets and confidential information. The other way of doing this of course is also to redact the sensitive information from documents, so if you don't want the defendant or the court to know certain things you redact it. Now of course it becomes then a tussle as to how relevant the redacted portion is for the purpose of the trial, as confidential information or the technical drawings to compare it with a patent. I have to lay down the foundation in my written statement to say that this is the patent in which the drawings are similar to the plaintiffs claimed trade secret and because the plaintiff alone has the custody of its trade secret, you reserve the right to summon it during discovery. Chances are that summoning it later during discovery becomes very difficult especially after the new commercial courts act came in and it amended the CPC. So now the documents, the way it is to be presented to court, the way it is to be exchanged during discovery very clearly laid down and if you don't follow the procedures later on bringing these documents on record becomes very very difficult. Now the other thing that you obviously look at in the context of a trial, what is the controversy that you're trying to address? Now here and this is a mistake that I often see happening, the moment court frames an issue in an action involving trade secret or confidential information. Don't take it for granted and start the trial because the framing of the issues is a notice by the court to the parties to say according to the court these are the controversies and this is the burden of proof of each party to prove it. Now suppose if the plaint makes references to business information like customer information, engineering drawings and software code and the way the issue is framed has to be specific to each category of confidential information. Now instead of the court frames a very generic issue saying whether the plaint have proved that the defendant had misappropriated its confidential information, the benchmark used to prove or disprove each category of confidential information, you don't have the opportunity to bring it out in trial because the question has been framed in a very non-nuanced manner and in a very generic fashion. So the moment the court frames an issue, have a look at it, file appropriate applications to ensure that the issues are amended because you want the full extent of the nuances involved around each category of confidential information to be correctly framed as an issue so that then you have a foundation for your questions in cross examination, you have a foundation for your arguments thereafter and you have a foundation to establish that plaintiff may succeed on engineering drawings but cannot succeed on business information. So the different yardsticks for each category of confidential information cannot be fully adjudicated unless and until the issues are framed properly and it is the responsibility of the counsel for both sides to assist the court in ensuring that the issues are framed in a proper manner. The next step of course is your focus whether on as a plaintiff or as a defendant is to show that you either satisfy or don't satisfy the requirements of what is confidential information. From a plaintiff's point of view, your examination in chief should set out with sufficient particularity, what is the trade secret, what are the steps you have taken to protect it, the extent to which it is known within the organization or outside the organization, the extent to which it has given you a business advantage, the extent to which other people are unable to, at the extent of time it would take for somebody else to develop the same trade secret, all of that should be part of your examination in chief. From the defendant's point of view, you will be testing the plaintiff's case on every one of these factors. Your thrust of your cross examination will be to say that you haven't taken sufficient steps to protect confidential information that a lot of people knew within the organization and outside of it. Therefore, it's already in public domain that you did not spend sufficient amount of time, effort and money to develop it. It does not provide you an economic advantage. So your entire line of cross examination will be on these lines. You will be for example, summoning documents to check whether or not the plaintiff's claimed revenues is actually for the trade secret or something else. So these are the broad parameters on which you essentially conduct your trial and you narrow down the focus to these points. Now, obviously one part of it is on precautions taken. Have you taken sufficient precautions to ensure confidentiality? So there you'll check whether the own devices were permitted, whether personal email addresses were allowed to be used, what kind of access control was permitted within the organization, so on and so forth. Now, last but not the least, you could employ a technical expert to identify the breach. You do have digital forensics where somebody comes, does a sweep of the computer system, identifies on what date who has actually taken the particular trade secret out of a computer. So especially if your trade secrets are in the form of electronic storages, this kind of a professional will be able to help. But their ability to pinpoint a particular person as the source of the breach is only as successful as how good your trade secret policy is. So if you don't have individually assigned computers, which are password protected, how do you ascertain who actually access the system to take away the file which is considered confidential? So a lot of your ability to either succeed or defend a case of confidential information breach depends on how good or bad the systems are in place at the at the plaintiff's premises for preserving confidentiality. And these are the questions that you will try to to address during the trial. From a defendant's point of view and from a plaintiff's point of view, we'll also try and establish because no defendant will admit that he had access and he took it away. So from the plaintiff's point of view, what you try to establish during the cross examination of the defendant is that he was a person who had a certain degree of responsibility which enabled him to access this kind of confidential information, that as part of his work he was routinely required to access this kind of confidential information. What you want to show that is that this person had access. He could have taken it if he was so chose to and then you satisfy every other burden of proof requirement through circumstantial evidence. But what you're trying to essentially establish that is that the person had access, motive and opportunity, access to confidential information, probably attribute motive to say that he wanted to start a business of his own or probably take a job with a competitor and then show opportunity, how he actually had the opportunity to come and take it away that day. If you're able to get a confession out of him and cross, nothing like it. But what you essentially try and establish these three things, if you do that as the plaintiff, chances are that you may actually have standarded your case for enforcement of the confidential information. From the defendant's point of view, the contra is absolutely true. You try and establish how it was not confidential information, how you had no access, no motive or no opportunity. And this is broadly how you address a trial on the subject. So to conclude, non-distortion agreement is great, but that will not be sufficient evidence to sustain an action for confidentiality. You will have to do a lot more than just show the existence of an agreement. We'll have to show that what is defined as confidential information in the agreement is actually capable of enforcement as confidential information under law. So the second point being that there are no specific legislations addressing this particular subject, which means that you fall back on conventional laws like Indian contract act, the common law of confidence, the specific relief act, they continue to be very, very relevant. And last but not the least, this is a very common mistake. Sometimes plaintiffs end up filing a single suit, seeking release for confidentiality of information as well as seeking to enforce non-compete agreements, especially when the term of the agreement has come to an end either because it has expired or it has been terminated. So essentially they want a former employee or a vendor from going to a competitor. Now courts have consistently come back and said the moment the agreement term has expired, unreasonable restraint of trade. Now when you merge your confidentiality and these kind of untenable non-compete related reliefs, chances are that the seriousness of the confidentiality relief is compromised by your non-compete related reliefs. This was especially the case in the judgment of American Express Limited versus Priyapuri where the plaintiff wanted to preserve the confidentiality of customer information and wanted the employee not to join a competitor. Now what the court concluded is that the effort to preserve confidentiality was an indirect way to enforce the non-compete and therefore it refused to grant both reliefs and held that customer information is not even confidential. So these are some of the pitfalls that are very, very important to address. The other thing to remember, each category of confidential information for example carries its own benchmarks to determine whether it is actually confidential or not. So for example with pricing information, there's a very famous judgment in Illinois court which is I think Archer Middle and Archer Company versus Daniel something. I'm happy to provide the citation later. In that they said look your pricing information by itself is not confidential. What is confidential is what is called as negotiating tolerance which means what is confidential is say if the plaintiff is able to sell a product up to the price of rupees 50 without incurring a loss but the moment they sell the product at 49 they incur a loss the negotiating tolerance is rupees 50. That is confidential not the actual price at which you sell the product. Same thing with confidential information involving customer information. Sometimes plaintiffs come back and say my information of my customers is confidential but their website will actually show that all their customers are listed as customers for marketing purposes. So these are examples where you will see that though it is defined as confidential information in the NDA because of subsequent conduct of the plaintiff the confidential information can no longer be enforced. So knowing each category of confidential information and knowing what are the dynamics of each category is very critical to be able to litigate this in the correct fashion. So I think with that I come to the end of my session. Thank you very much. This is my contact information. The floor is now open to questions. Mr. Chowk it was a quite an illuminating session. Do you have certain questions on the chat? If you want you can read that or I can read it for you. Okay so Bikiniar is famous for sweets. Namkeen can top producers apply for trade secret. So first and foremost the term applying for trade secret is a little bit of a misnomer because you don't apply for registration of a trade secret. You essentially do the opposite. You don't apply for it. You don't tell anybody you just keep it as a trade secret. Can the producers apply for trade secrets? The producers can maintain confidentiality of the recipe used in some of the sweets, some of the Namkeen and the recipes can definitely be protected as a trade secret through a combination of things. It could be confidentiality agreements coupled with a lot of technical and practical measures to prevent access to the recipes and to ensure that whoever has access is in a position to maintain its confidentiality. Now I see one more. I as civil engineer have evolved new method for knowing highway geometry. Can I apply for confidential information although it is not mentioned but new unique application? Certainly. But again you don't apply for trade secret or confidential information registration. You just maintain it that way. So if you develop the method keep it to yourself. If you have staff members who are deployed on the field to undertake this analysis, make sure that they either don't have access to the full set of the method or even if they have access to it, make sure that they are walked down by a complete confidentiality agreement. So that way it will be easier for you to preserve the confidentiality of the information. Does that answer the questions? Yeah, yeah. There's one Mr. Avin. Yes, please. Yeah, Arvind. I'm not able to hear Mr. Arvind. Arvind, it's not audible. Now you're able to hear me? Yes, yes, yes. Mr. Ashoka, I'm Arvind Kamath from Bangalore. First of all, congratulations. It was a fantastic presentation. One of the best presentations. Thank you so much. I have my guys here in the in the in the car. Actually, I was telling this, this is the way this is the type of commitment. This is the type of depth which is required. Thank you so much. Thank you so much, Mr. Vikas. Wonderful you. I don't know how Mr. Vikas in Bangalore has chosen such a gem. Mr. Vikas, thank you so much. Fantastic. Yes, I've taken down your number, sir. Fantastic. All the best. Good luck. Good luck. Yes, yes, yes, yes. Thank you. Yes, yes. Thank you, Mr. Ashoka for sharing your knowledge. Thank you. We will share the PPT on the WhatsApp group. Everyone stay safe. Stay blessed. And you get good. Yeah, PPT, please. PPT, please. Yes. I will share it. Thank you so much.