Intellectual Property Rights - Law and Practice · Protection of Trade Secrets

Trade Secrets under TRIPS Agreement: Article 39 Explained

Updated 11 October 2026 · Fact-checked

Article 39 of TRIPS requires WTO members to protect undisclosed information against unfair competition, as laid down in Article 10bis of the Paris Convention. Information qualifies if it is secret, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret. Members must also protect submitted test data.

Understand Trade Secrets under TRIPS Agreement

TRIPS is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. Its Section 7 of Part II is titled "Protection of Undisclosed Information" and contains only one article, Article 39. The TRIPS text does not use the term "trade secret". It says "undisclosed information". In practice the two mean the same thing.

The basic idea is simple. A business may hold know-how, formulae, customer lists or processes that give it an edge. If a rival gets them by dishonest means, the owner should have a remedy. TRIPS does not create a property right like a patent. It frames protection as part of effective protection against unfair competition, and it links this to Article 10bis of the Paris Convention (1967).

Article 39(1) sets the general duty. Members must protect undisclosed information in accordance with paragraph 2, and data submitted to governments in accordance with paragraph 3. Article 39(2) then says that natural and legal persons must have the possibility of preventing information within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices.

For this protection, the information must meet three conditions. It must be secret, meaning not generally known or readily accessible to persons in the circles that normally deal with that kind of information, either as a body or in the precise configuration and assembly of its components. It must have commercial value because it is secret. And the person lawfully in control must have taken reasonable steps under the circumstances to keep it secret.

The footnote to Article 39 explains "a manner contrary to honest commercial practices". It includes breach of contract, breach of confidence and inducement to breach. It also covers acquisition by third parties who knew, or were grossly negligent in failing to know, that such practices were involved.

Article 39(3) deals with test data. Where a member requires submission of undisclosed test or other data for approving pharmaceutical or agricultural chemical products that use new chemical entities, the origination of which involves considerable effort, it must protect that data against unfair commercial use. It must also protect the data against disclosure, except where necessary to protect the public or where steps ensure the data is protected against unfair commercial use.

Members have freedom in how they implement this. India, for example, has no dedicated trade secret statute and relies on contract law, equity and the law of confidence.

Key rules to remember

Source of obligation: TRIPS Article 39 = protection of undisclosed information as part of protection against unfair competition (Paris Convention, Article 10bis); Article 39(1) links the duty to Article 10bis. Say this link in every answer.
Three conditions for protection (Article 39(2)): Secret + Commercial value because secret + Reasonable steps to keep secret; All three must be met together. Failing any one removes protection under Article 39(2).
Wrongful conduct test: Disclosure, acquisition or use without consent + contrary to honest commercial practices; Footnote examples: breach of contract, breach of confidence, inducement to breach, and acquisition by third parties who knew or were grossly negligent.
Test data rule (Article 39(3)): New chemical entity + considerable effort + data required for approval of pharmaceutical or agricultural chemical products = protect against unfair commercial use and disclosure; Disclosure is allowed where necessary to protect the public, or where steps ensure protection against unfair commercial use.
Who is protected: Natural and legal persons lawfully in control of the information; The person must have lawful control. A thief cannot claim protection.

How to solve Trade Secrets under TRIPS Agreement questions

Most questions are either theory (explain Article 39) or case-based (does this information qualify, and has there been a wrong?). Use the same frame for both.

1Name the provision first: TRIPS Article 39, Section 7 of Part II, and its link to Article 10bis of the Paris Convention.
2State that the Agreement protects "undisclosed information" against unfair competition and does not create a patent-like exclusive right.
3Test the information against the three conditions one by one: secrecy, commercial value because of secrecy, and reasonable steps to keep it secret.
4Apply each condition to the facts given. Quote the facts, such as an NDA, restricted access or a password policy.
5Test the conduct: was the information disclosed, acquired or used without consent and contrary to honest commercial practices? Use the footnote examples.
6Check whether the facts involve regulatory test data for a pharmaceutical or agricultural chemical product. If so, apply Article 39(3).
7Conclude clearly: protected or not, and what remedy route a member state would give. Mention that India protects through contract, equity and confidence law.
8Close with one line on flexibility: TRIPS sets minimum standards and members choose the method.

Quickest way: The S-V-R-C check

When to use it: Use this for any short case question with a few minutes per part.

S: Is the information secret in the sense of Article 39(2)?
V: Does it have commercial value because it is secret?
R: Were reasonable steps taken to keep it secret?
C: Was there conduct contrary to honest commercial practices, without consent?
Write the conclusion in one sentence and cite Article 39 and Article 10bis.

Common mistakes in Trade Secrets under TRIPS Agreement

Saying TRIPS grants an exclusive property right in trade secrets.
Students compare it with patents and copyright.
Fix: Write that Article 39 protects against unfair competition and gives owners the possibility of preventing misuse. It does not give a registered right.
Listing only two conditions, usually secrecy and commercial value.
The third condition, reasonable steps, is easy to forget.
Fix: Memorise S-V-R. Secrecy, value because of secrecy, reasonable steps.
Saying information needs value in itself, ignoring the words "because it is secret".
Students read it as general commercial worth.
Fix: The value must come from the secrecy. Publicly known information with value does not qualify.
Leaving out Article 10bis of the Paris Convention.
Students learn Article 39 in isolation.
Fix: Always say protection is given in the course of ensuring effective protection against unfair competition under Article 10bis.
Treating Article 39(3) test data as covering all products.
Students remember "test data" but not the limits.
Fix: Limit it to pharmaceutical or agricultural chemical products using new chemical entities, where considerable effort was involved and submission is required for approval.
Stating that India has a special trade secret Act because TRIPS requires one.
Students assume each TRIPS article has a matching statute.
Fix: Say that TRIPS leaves the method to members. In India protection comes through contract, equity and the law of confidence.

Worked examples

Example 1

Explain the conditions under which information is protected as undisclosed information under Article 39 of the TRIPS Agreement. (Short answer)

Show the solution

Identify the source: Article 39 in Section 7 of Part II of TRIPS, applied in the course of ensuring effective protection against unfair competition under Article 10bis of the Paris Convention (1967).
Condition 1, secrecy: the information is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons in circles that normally deal with that kind of information.
Condition 2, commercial value: the information has commercial value because it is secret.
Condition 3, reasonable steps: the person lawfully in control has taken reasonable steps under the circumstances to keep it secret.
Add the consequence: a person in control can prevent disclosure, acquisition or use by others without consent in a manner contrary to honest commercial practices.

Answer: Information is protected under Article 39(2) if it is secret, has commercial value because it is secret, and has been subject to reasonable steps by the lawful controller to keep it secret. All three conditions must be met.

Example 2

Spice Route Foods Pvt. Ltd., Kochi, has a blend recipe known to four senior staff. Each signs an NDA, and the recipe is kept in a locked, access-logged system. Meera, a chef who left the company, joins a rival and shares the recipe with it in breach of her NDA. The rival, aware of the breach, uses the recipe. Advise on the position under Article 39 of TRIPS.

Show the solution

Secrecy: the recipe is known to only four staff and is not generally known or readily accessible to persons in the trade. This condition is met.
Commercial value: the blend gives Spice Route an edge in the market because it is not known to rivals, so value arises from secrecy.
Reasonable steps: NDAs with each person who knows it, a locked system and access logs are reasonable steps under the circumstances.
Conduct: Meera disclosed the recipe in breach of contract without consent, which the footnote treats as contrary to honest commercial practices.
Third party: the rival knew of the breach and used the information. The footnote covers acquisition by third parties who knew, or were grossly negligent in failing to know, that such practices were involved.
Conclusion on remedy: TRIPS requires that Spice Route has the possibility of preventing this misuse. In India this would be pursued through breach of contract and breach of confidence claims, such as an injunction and damages, since there is no dedicated statute.

Answer: The recipe qualifies as undisclosed information under Article 39(2). Meera's disclosure and the rival's knowing use are contrary to honest commercial practices, so Spice Route is entitled to seek to prevent them, in India through contract and confidence-based remedies.

Exam tips

Write the three conditions in a numbered list. Examiners look for all three, with the words "because it is secret" and "reasonable steps".
In case questions, quote the facts for each condition before concluding. A bare conclusion earns little.
Mention Article 10bis of the Paris Convention and the footnote on honest commercial practices to show depth.
Keep Article 39(3) as a separate short paragraph. Do not mix it with Article 39(2).
End with the Indian position: no dedicated statute, protection through contract, equity and the law of confidence.

Practice questions from Protection of Trade Secrets

Trade Secrets under TRIPS Agreement: frequently asked questions

Does TRIPS use the term trade secret?

No. Article 39 speaks of undisclosed information. In practice this covers what is commonly called a trade secret, such as formulae, processes and customer lists.

What are the conditions for protection under Article 39 of TRIPS?

The information must be secret, must have commercial value because it is secret, and must have been subject to reasonable steps by the person lawfully in control to keep it secret. All three must be satisfied.

Does TRIPS require a separate trade secret law?

No. TRIPS sets the standard that persons must be able to prevent misuse contrary to honest commercial practices. Members choose the method, such as contract law, unfair competition law or the law of confidence.

What does Article 39(3) of TRIPS cover?

It covers undisclosed test or other data that members require for approving pharmaceutical or agricultural chemical products using new chemical entities. Members must protect it against unfair commercial use and against disclosure, except where necessary to protect the public or where steps ensure protection against unfair commercial use.