Global IP Matrix - Issue 7

Confidential
Information –
Sri Lankan Perspective
The law protecting confidential
information (or trade secrets)
is varied worldwide.
Confidential information may
refer to any information of
value or commercial sensitivity
that is not already available to
the public.
Undisclosed information may include any
information of commercial value from
information about a company’s financial
affairs, business operations, or customer
engagements to trade secrets that are the
modus operandi or signature of a company.
For instance, the formula for Coca-Cola syrup,
which bottlers combine with carbonated
water to create the company’s flagship cola
soft drink, is a closely guarded trade secret
since 1891. The secret recipe has a commercial
value that identifies the owner over any other
product in the market. Such a secret recipe
gives its rightful owner an edge over other
competitors, and protection of the same is key
to the business. Similarly, a source code for a
computer programme, a new chemical formula
or a scientific technique, unpublished research
information, business plans of an employer,
even a list of valued customers may all form
part of confidential information. Intellectual
Property rights are thus secured through the
concept of confidential information.
Protection of trade secrets
Protection of trade secrets or undisclosed
information is an intricate subject in itself:
The rights are not registrable as in the case
of trademarks, Patents, Industrial Designs,
nor would there be a particular time period
undisclosed information ought to be
protected. Yet the protection of the same is
essential as such information may be key
to a particular business entity. To promote
the protection of undisclosed information,
most companies enter into Non-Disclosure
Agreements with their employees and business
partners, adopt appropriate physical and
digital security measures in data storage,
and only share information with the staff
that needs access to such information. There
is an implicit understanding that business
advisors or outsource agents would protect the
confidentiality of the information disclosed
in business ventures, even where no explicit
agreements are entered.
Written by Anomi I Wanigasekera,
Partner & Head of the Intellectual Property Division, Julius & Creasy
www.juliusandcreasy.com
Sri Lanka & the law
relating to Undisclosed
Information
The law relating to Undisclosed Information
is embodied in the Intellectual Property Act
(Act) of Sri Lanka. 1
Penalties are
set for misuse
of undisclosed
undisclosed
Information shall be considered as
“undisclosed information”:
It is not as a body or in the precise configuration
and assembly of its components, generally
known among, or readily accessible to, persons
within the circles that normally deal with the
kind of information in question;
“if it has actual or potential commercial value
because it is secret, and if it has been subject to
reasonable steps under the circumstances by the
rightful holder to keep it secret.” 2
The Act further stipulates that undisclosed
information shall include “technical
information related to the manufacture of
goods or the provision of services; or business
information which includes the internal
information which an enterprise has developed
so as to be used within the enterprise.” 3
The law of Sri Lanka bars the misuse of
undisclosed information: “Any act or practice…
that results in the disclosure, acquisition, or use
by others, of undisclosed information without
the consent of the person lawfully in control of
that information … and in a manner contrary
to honest commercial practices shall constitute
an act of unfair competition.” 4
“Disclosure, acquisition or use of undisclosed
information by others without the consent of
the rightful holder may result from industrial
or commercial espionage; breach of contract;
breach of confidence; inducement to commit
any of the acts (above); and acquisition of
undisclosed information by a third party who
knew or was grossly negligent in failing to know,
that an act referred to (above) was involved in
the acquisition.” 5
1 No.36 of 2003
Even in case of patent registration, utmost
2 S.160 (6) (c )
care is taken to protect the confidentiality of
3 S.160 (6) (e )
information: The Act stipulates that before
4 S.160 (6) (a )
granting of the patent, the files may only be
5 S.160 (6) (b )
examined with the written permission of the
6 S.82 (2)
applicant. 6 7 S.160 (8) (a )
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information: “Any
person, who willfully
and without lawful
authority, discloses any
information
shall be guilty of an offence
under this Act and shall on
conviction after a trial before a
Magistrate be liable to a fine not
exceeding five hundred thousand
rupees or to imprisonment for a term
not exceeding six months or to both such fine
and imprisonment.” 7
In the case of HC (Civil) 31/2017/IP Justice
Ruwan Fernando in his Order, granting the
Interim Injunction in favour of the Plaintiff
company has comprehensively analysed what
constitutes Confidential Information.
“…..the Defendants could not argue that the
information gained by them in the course of
their employment fall into information which
was easily accessible to the public or they were
part of the knowledge, skill, and experience that
was gained by them during their employment
and therefore, they are at the liberty to use them
or disclose them after the employment without
breaching their duty of fidelity to their former
employer or non-discloser agreement.”
The Sri Lankan stance on
confidential information seems to be
inclusive, counting in confidential
information as intellectual property.
In conclusion, creative thoughts
that may turn readily available
public information to right-worthy
confidential information are given
recognition in the Sri Lankan legal
setting.
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