Protecting Undisclosed Information For Pharmaceutical Industry

The exclusive rights that the Intellectual Property Rights provides to an inventor and a creator in consideration for the efforts being taken by them so that they could reap commercial benefits out of their work, substantiates the importance of IP. Giving due importance to the intellectual labor associated with the innovation is what makes the process of innovation a continuous cycle. These benefits bestowed upon the inventor, either as an individual or as a corporation, bring us insight into how every industry should evolve its IPR policies, management style, and strategies, depending on the area of its specialty. Under Covid-19, the evolving era for Pharmaceuticals industries requires them for having an effective and focused IPR strategy. Undoubtedly, the quantum of research and development (R&D) has always been on a rise and it is not going to be down in the days to come. The stakes of the developers of technology have always been on a rise, and hence, the need to protect the knowledge from unlawful use has become expedient, at least for a period, that would ensure recovery of the R&D and other associated costs and adequate profits for continuous investments in R&D. For all these, a focused IPR strategy is inevitable.

The extent of Undisclosed Information

The protection of undisclosed information is an important facet for pharmaceutical industries, R&D Institutions, and other agencies. Undisclosed information, generally including trade secret or confidential information including formula, pattern, compilation, program, device, method, technique, or process requires heavy protection. Well, protection of undisclosed information or trade secret is not new to humanity and we have seen it even from an ancient angle; at every stage of development, people have evolved methods to keep important information secret, commonly by restricting the knowledge to their family members. Trade-Related Aspects of Intellectual Property Rights (TRIPS) does provide a provision for the protection of undisclosed information. Under Article 39 of the TRIPS, Members are obliged to ensure the protection of undisclosed information through a system developed through appropriate legislation. Patents Act 1970 helped the Indian Pharma Industry to become a vibrant and globally competitive segment in the area of bulk drug production. Nevertheless, our Indian Act doesn’t talk about the protection of the Trade Secret of undisclosed information. With regards to Article 39 of TRIPS, even many of the documents submitted in pursuance of patent documentation are not bound by secrecy clause and illegal access to such trade secrets is common.  

Creating Contractual Obligations

TRIPS do not define Trade Secret in any of its provision. The basic understanding delves around the notion of information that is not generally known or accessible to the world. An important facet of the same is the commercial value that is associated with it and that is why it is deemed to be a secret and the owner has every right to treat it as secret. While TRIPS does not provide any modalities of achieving this, which can be inferred from the language of the provision, it has been left to the individual countries to adjudicate on the matter. Since, there being no legislation for trade secrets in India, still we can find Indian Courts having upheld trade secret protection on basis of principles of equity, and at times, upon a common-law action of breach of confidence, which in effect amounts to a breach of contractual obligation. The remedies available to the owner of trade secrets are to obtain an injunction preventing the licensee from disclosing the trade secret, the return of all confidential and proprietary information, and compensation for any losses suffered due to disclosure of trade secrets. So the protection can be taken care of under the contractual obligations.

Assuming the expected cost of a drug to be around $500 million, taking all associated risks, no company can take a risk with its IP. All those aspects which become a part of a Corporate culture must also include creating, obtaining, protecting, and managing IP which should be given importance in the same manner as the raising of resources and funds are given. It is imperative to understand that the importance of scientific knowledge drives the global pharmaceuticals industry. The management of innovative risk should be effectively considered while gaining a competitive edge over the market.

For undisclosed information, having no legislative backing, it is very pertinent for the industry to establish and maintain trade secrets. The idea of Coca-Cola to lock up its trade secret in a vault, permitting only a few executives to enter is not necessary and not always feasible. Various internal efforts can be taken with the help of technology to protect the trade secret. Labeling key documents as ‘confidential', ‘secret’ could be beneficial. One can restrict the entry and exit of employees and the access to documents could be done by the standard security procedure like password protection. Even in the absence of an express confidentiality clause in the contract, these things will prove implied confidentiality and any breach will help the industry to prove its implied secrecy. The optimum efforts should be taken to maintain secrecy by the industry, through the adoption of an appropriate policy, adequate documentation, and legal instruments such as non-disclosure agreements.

Author: Saransh Chaturvedi (an advocate) currently pursuing LLM from Rajiv Gandhi School of Intellectual Property Law (IIT Kharagpur).  In case of any queries to Global Patent Filing, please contact/write back to us at

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