Others Overlaps in IP Trade Secret

Trade Secrets and the Right to Information: Thoughts on Ferani Hotels v. State Information Commissioner [Part I]

A recent judgement [PDF] from the Bombay High Court has thrown the spotlight on the interplay between IP protection and the Right to Information Act. Over the course of two posts, I’ll summarise the judgement and try to engage with some of the issues that inhabit its penumbra.

By their very nature, the values sought to be protected by IP law seem to be at odds with those sought to be protected by the RTI Act. The former is aimed squarely at regulating the flow of information, while the latter aims to foster transparency in governmental action by enabling the disclosure of information created and collected by public authorities (a broader term than “State” under A. 12, according to the Supreme Court in Thalappalam Service Co-op. Bank v. State of Kerala).

In a limited range of circumstances, the free flow of information envisaged by the RTI Act operates in conflict with other public policy objectives. S. 8(1) of the Act, which provides for exemptions from disclosure, lays out these conflicts. Of these, the situations that interest us most are those concerning information submitted to public authorities by third parties – these are covered in exemptions (d) [commercial confidence, trade secrets and IP], (e) [information received in a fiduciary capacity] and (j) [personal information].

Case law in these areas, especially in the higher judiciary, is quite sparse. While the Supreme Court has addressed the question of personal information (Girish Ramachandra Deshpande v. CIC, RK Jain v. Union of India, etc.), the only case in which it has even cursorily touched upon the implications of the RTI Act on IP was ICAI v. Shaunak Satya, in which the court brushed away copyright concerns on the ground that the ICAI was a statutory body, and therefore the disclosure of questions and model answers to CA examinations could not be prevented on the ground that it would constitute copyright infringement. The question of trade secrets hasn’t been dealt with in the Supreme Court at all, as we’ll see in the next post.

The facts in Ferani Hotels are as follows: the Petitioner had entered into a contract Nusli Wadia (Respondent #3) for developing real estate in Mumbai. A dispute arose between the parties, and Mr. Wadia terminated the development agreement and filed a civil suit (still sub judice) seeking a declaration that the termination was valid. In the course of the suit proceedings, Mr. Wadia’s attorneys sought the production of documents detailing the development of the real estate, but Ferani’s attorneys refused to comply. In response, Mr. Wadia filed an RTI application to the Bombay Municipal Corporation seeking certified copies of the property card, building and development plans submitted by Ferani or its architects for approval from the Corporation. Since the request demanded third party information, the PIO notified Ferani under S. 11 of the Act. The latter responded with a laundry list of objections, leading to the application’s dismissal. Following a partially successful First Appeal, Mr. Wadia appealed before the State Information Commissioner, who directed the Corporation to fulfil the request in its entirety. In response to this order, Ferani filed a Writ Petition before the Bombay HC.

The Petitioner’s primary argument was that the information sought to be disclosed was exempted under S. 8 of the Act. Specifically, the Petitioner pleaded that it was protected under S. 8(1)(d) since development plans were trade secrets and their disclosure to Mr. Wadia (a business rival) would erode its competitive advantage in the market.

Further, the Petitioner asserted that its development plans were subject to copyright, and the unauthorised reproduction of such material would amount to infringement against which its interests are protected by S. 9 of the RTI Act.

The court held that development plans constituted information of a public nature, and to extend the protection of S. 8 to them would deprive the public of the opportunity to examine layout plans approved by the Corporation, leading to a “total lack of transparency and accountability” in the manner in which the Corporation granted approvals. The court also sought to draw the line between trade secrets protected by S. 8 and public records capable of being disclosed under the Act, holding that the transition from trade secret to public record occurred at the point where the public authority (the Bombay Municipal Corporation, in this case), granted approval in exercise of its statutory authority.

The court also rejected the S. 9 argument, noting that the Petitioner had conflated trade secret protection with copyright protection (“confidential information cannot be equated with a copyright”). Further, the court cited S. 52(1)(e) of the Copyright Act, which carves out an exception for the reproduction of a work in the form of certified copies issued in accordance with any law.

Another argument raised by the Petitioner was that the inability of Respondent #3 to induce production of these documents in the civil suit proceedings (despite going all the way up to the Supreme Court) would preclude him from requesting the documents under the RTI Act. The court swiftly rejected this argument, holding that in the absence of explicit prohibitory orders issued by a competent court, mere unsuccessful efforts to admit the documents in trial would not take away the Respondent’s statutorily granted right to information.

For all these reasons, the court dismissed the writ petition.

Image from Wikimedia Commons

The Bombay High Court in action

If judgements are like football tactics, Ferani Hotels looks like the kind of long ball goal exemplified by Miroslav Klose against England in the 2010 World Cup – quick, clean, efficient and the shortest route from origin to destination. The bench restricts itself to the particular facts at hand, applies the law without making any sweeping statements in obiter, and wraps up the whole thing in about 30 pages of double-spaced text. The difference between a judge and a blogger here is the difference between Klose himself and a kid playing FIFA on his shiny new PlayStation – the former is burdened by the fact that his actions have immediate, real-world consequences, while the largely inconsequential nature of a blog post allows the latter to extrapolate, nit-pick, and attempt to address larger questions. In the next post, I’ll try and do all this and more (hopefully without sounding like a PlayStation kid telling Sir Alex Ferguson that he hasn’t thought his tactics through).

Balaji Subramanian

Balaji is a third year student at NALSAR, Hyderabad. He is currently an editor of the Indian Journal of Intellectual Property Law. He is fascinated by technology law and IP law, and is an active member of NALSAR's Technology Law Forum. When he isn't doing law school things, he wanders the country looking for quizzes to participate in. He can be emailed at [email protected]

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