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Law Commission’s 289th Report on Trade Secrets and Economic Espionage

Why is it in the news?

  • In response to a reference from the Department of Legal Affairs and Legislative Department in 2017, the Law Commission undertook the examination of enacting laws concerning Trade Secrets (TS) and Economic Espionage (EE).
  • Trade Secrets involve confidential business information that holds commercial value and can be sold or licensed, while Economic Espionage refers to the deliberate acquisition of such information for the benefit of a foreign state.

Need for Enactment

  • Facilitate the transfer of technology and foster cooperation among industries across national borders.
  • Protect the creative resources and intellectual capital of Micro, Small, and Medium Enterprises (MSMEs) and startups, essential for fostering innovation and growth.
  • Safeguard critical technologies and sectors such as defence, nuclear, and telecommunications from economic espionage, which poses threats to national security.
  • Consolidate the existing fragmented legal framework to provide certainty and improve compliance with respect to the protection of trade secrets and prevention of economic espionage.

Key Recommendations

  • The Law Commission recommends the enactment of separate laws to address Trade Secrets and Economic Espionage.
  • Trade Secrets Act: It suggests a broad definition of trade secrets to encompass various aspects and industries, allowing for judicial interpretation to adapt to emerging technologies and business practices.
  • Economic Espionage Act: This proposed legislation would specifically target acts of economic espionage aimed at acquiring confidential information from domestic companies and government entities for the benefit of foreign states.
  • Exceptions: The report recommends including exceptions for Whistleblowers, Compulsory Licensing, and Government use to balance the protection of trade secrets with public interest considerations.
Existing Legal Framework

·       Currently, there is no comprehensive legislation in India specifically addressing the misappropriation of trade secrets and economic espionage.

·       Relevant legal provisions are scattered across various laws, including the Indian Contract Act, 1872, Specific Relief Act, 1963, Indian Penal Code, 1860, and Bharatiya Nyaya Sanhita, 2023.

·Top of Form



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