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Spring Board Doctrine: A Critical Study Of Trade Secret Protection

An information which is used in trade or businesses, has to be kept confidential for the business to stay ahead of the competitors and to maintain an added advantage over them. This secret information is known as the Trade Secret. It is said to be the most valuable information of the company which has to eventually be protected by the owner of the company, as leakage of this confidential information will give the competitors an opportunity to misuse the secret information. The competitors can misuse this information in any way, they can use it for their benefit or they can even use it as a leverage to defame the company.

In order to protect the Trade Secret, this Spring Board doctrine was established. This doctrine basically acts as a protection given to the employers of the companies, which they can use in order to help them secure their trade secrets. A Spring Board doctrine is an injunction which is specifically designed to remove or to limit the advantage that an employee has gained through any unlawful activity typically through the misuse of the employer's confidential information.

Trade Secret

Trade Secret can be any information relating to the manufacturing methods, plans, recipes, pattern, compilation, formula, know-how, device, practice, technique, process, program, instrument, design, sketch, commercial method or other technical information of the company and its products.[i]
The term Trade Secret has some essential requirements, which are:
  1. the information should not be copied or used in any other trades or businesses;
  2. it should be completely original;
  3. the information must be a secret and the public should not have any clue regarding the same;
  4. it should have some commercial or economic value and should not be anything insignificant or indefinite;
  5. the information should be kept as a secret and it will be the responsibility of the owner to take reasonable steps to ensure its secrecy.
Trade Secrets can be protected without needing to register them, which essentially means that trade secrets do not involve any procedural formality. The time span for the protection of a trade secret is unlimited.

Various Laws That Protect Trade Secrets

The WTO[ii] has made it mandatory for all the countries who are the members of this organization to draft the legislations according to the rules that are incorporated in TRIPS[iii], which has the provisions that can be used to protect the trade secrets. Despite being a member country, India still does not have a specific legislation which deals in these Trade Secrets.

However, there are some legislations which are being used by the Indian Courts in order to deal with these trade secrets. Some of these legislations are: Code of Civil Procedure, Competition Act, Contract Act, Design Act, Copyright Act, Patent Act, Specific Relief Act.

The courts have developed trade secret law with an aim to maintain and promote commercial ethics and fair dealing based on the law of unfair competition. Due to these cases, the Indian Judiciary has started to adopt and apply the Spring Board Doctrine in order to deal with the cases which are related to trade secrets.

Spring Board Doctrine

According to definitions provided by various Courts, the Spring Board Doctrine can be explained as, any information which has been obtained in confidence cannot hence be used as a springboard for the activities which may cause harm to the person who has provided with the confidential information. This pertains to the instance if all the features of the related information have been published or can be found by actual inspection by any member of the general public.

In the 2019, Tesla filed two lawsuits against their former employees and an auto driving startup, Zoox. Tesla held that the employees leaked the confidential information of the source code which relates to the company's auto pilot to the Xiaopeng Motors and demanded for the compensation. The second lawsuit was filed against Zoox, where an ex-employee of Tesla leaked the confidential information and used it to lure other employees towards the competitor. Tesla again demanded for a compensation.

In the Judgment of Inphase Power Technologies vs Abb India Limited[iv] the Court has said that if an ex-employee uses the information which is in his possession and acts in such a manner that it is likely to cause harm to the interest of the employer, he or she may be injuncted from using that particular information according to the doctrine of spring board. The court also said that a company which has invested its money, time and manpower in so much things like research and development should be protected against any infringement and passing of it.

The Bombay High Court in the case of, Bombay Dyeing and Manufacturing Co. Ltd. v. Mehar Karan Singh[v] held that:
Spring Board is a common law doctrine, which would apply even to the information which has been published or can be ascertained by the public.[vi]

The Delhi High Court in the case of, John Richard Brady And Ors v. Chemical Process Equipments P. Ltd. and Anr.[vii] held that:
the Springboard Doctrine will be applicable even in the absence of Non-Disclosure or any other related agreement.[viii]

The court had the opinion in which it said that trade secrets cannot be taken as subject to contracts and if there is any breach of confidential information, it will entirely depend on the principle of equity in which the person who receives the information in confidence cannot take any unfair advantage of that particular information.

The major principle behind this common law doctrine is that when a competitor employs an ex-employee of any company, he joins the company with all the trade secrets of his old company, hence, he may unintentionally disclose the information of his previous job and all the secret information he knows about that company. In this scenario, the former employer of the employee need not wait for the threats or usage of the trade secrets and can file a complaint to seek legal redress at once, in order to prevent the future possibilities of: ex-employee to go and work with the competitor, or the competitor from hiring employees from his company.

Conclusion
Trade Secrets protection is hence, a fundamental step towards innovations, foreign investments and promotion of healthy competition. The doctrine of Spring Board has been put into effect by the foreign courts which has eventually led the Indian Judiciary to follow their steps and to include this doctrine in the Indian legal system as well.

This doctrine protects the confidential information of the company which is known only to the employer, and if any person uses this information without taking consent or permission of the employer, he/she will be held guilty for an infringement of the employer's rights.

The employer can use this doctrine and claim the infringement, and he/she may also ask for an injunction and punishment which will be given to the guilty party. An advantage which is given to the employer is that he/she can protect his/her rights even before an actual infringement is done. The usage of this doctrine can be put to use even if he/she feels threatened that someone will use the trade secret.

In India, trade secret is one of the most deserted fields of law as there is no framework of proper policy. This sphere of legal system is still dependent on various other statutes that are followed in India. However, even without any explicit legislation, Indian courts have been successful in protecting the rights of an employer. One may opine that this doctrine of Spring Board will surely play an important and a major role in protecting the trade secrets of the companies in the near future.

End-Notes:
  1. Definition of Trade Secret given by Bryan A. Garner, in the Black Law Dictionary.
  2. World Trade Organization.
  3. Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights.
  4. M.F.A No.3009/2016, (KHC), available at http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/132122/1/MFA3009-16-14-09-2016.pdf.
  5. Notice of Motion No.4248 of 2008 in Suit No.3313 of 2008, (BHC), available at https://indiankanoon.org/doc/286447/.
  6. Ibid.
  7. AIR 1987 Delhi 372, available at https://indiankanoon.org/doc/1739601/.
  8. Ibid

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