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

Arjun Chemicals supplied a secret formulation to a contract manufacturer under a non-disclosure agreement. The manufacturer later sells the formulation to a third party who knew of the NDA. Which basis best supports an action against the third party in India?

Arjun can sue the third party for breach of confidence, because a person who receives information knowing it was imparted in confidence can be restrained from using it. Privity with the NDA is not required, and trade secrets cannot be registered or treated as patents.

  1. ABreach of confidence, as a person receiving information knowing it is confidential can be restrained from using itCorrect
  2. BInfringement of a registered trade secret
  3. CPatent infringement since the formulation is secret
  4. DNo action, since the third party was not a party to the NDA

Explanation

Equitable breach of confidence can bind third parties who receive information knowing it was disclosed in confidence. Privity of contract is not needed for this remedy, which makes the 'no action' option wrong. Trade secrets cannot be registered, and a secret formulation is not a patent.

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