Tuesday, August 31, 2010, 8/31/2010 08:30:00 AM

India and Trade Secrets: Former Board Member of Bombay Company Enjoined as to Some Information, But Not All, He Learned

By Todd

The Times of India is reporting on a new decision rendered by the Bombay High Court - certain Board discussions and business plans of a real estate company can NOT be treated as trade secrets under Indian law. The suit was brought by Bombay Dyeing against former Board Member Mehar Karan Singh. The company alleges he left Bombay Dyeing to join a competitive firm.

Although we haven't seen the actual printed decision, The Times of India suggests that Justice Roshan Dalvi did restrain Singh from divulging any information about software and a manual prepared by Bombay Dyeing.

The judge, however, refused the plea to stop the former director from letting out business plans that were discussed in meetings where Singh was present. "Strategic business plans, product mix, square footage of construction, capital expenditure or revenue budgets cannot be claimed to be matters of any confidential nature, which no other competitor would be aware of," the judge said. "(Singh) who attended the board meetings would have amassed information regarding to Bombay Dyeing's plans of operation. But he cannot be injuncted from disclosing those plans, if any, to the competitor except for what would cause damage to the company by such disclosure alone, if he carried them in his head," he added.

We can't tell if the last part of that ruling - the part that suggests an injunction can only issue if there is evidence that the disclosures would cause damage to the company - is essentially agreement with the standard American "irreparable harm" standard. Nonetheless, we found the ruling and the report interesting enough to post. This is a topic all developing societies and economies will be dealing with in time - how does the legal system protect competitively-sensitive information but still allow key personnel to utilize their general skills in competitive employment.


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