Proposals for Cancer Research for the Indraprastha Cancer Society and Research Centre in September 1995.

A Report for Indo-Canada Cooperation Office on Intellectual Property in Private Sector and Governance in October 1995.

A Report on Science & Technology to Meet the Human Settlement Challenges in the 21st Century to INSA in October 1995.

A Report on Promotion of Technology Flows of India, To and From Other Countries of Asia & Pacific, prepared for UN-ESCAP in February 1996.

The Institute completed four technology profile reports for the UN-ESCAP Asian and Pacific Centre for Transfer of Technology in their series `Emerging Technology Scenarios - Countries of Asia Pacific Region'. Four reports were on Kazakhstan, The Philippines, Sri Lanka and Vietnam.

In order to alert potential users about the availability of such reports and to indicate the capabilities of WITT, a brochure related to the studies completed was brought out. Copies of the brochure have been distributed to many interested organisations and agencies.

The Institute had been commissioned by the Ministry of Urban Affairs and Employment, Govt of India, to prepare a Compendium of R&D in the Field of Water Supply, Sanitation, Solid Waste Management and Storm Water Drainage. Based on the material collected, the Institute prepared a draft report of nearly 200 pages for the Ministry. The Ministry had suggested some modifications which were incorporated and the final report has been submitted.

8.

In connection with the programme that the Institute had organised on Eco-Mark, the Institute has prepared and put together a very good collection of background papers. This compilation has been very well appreciated by the participants. The Institute has been commissioned to bring out the proceedings with the support from the Ministry of Environment and Forests, Government of India.

9.

A report on 101 cases in the field of Intellectual Property (Patents) of interest to scientists and engineers was compiled on sponsorship from the Ministry of Science and Technology. The background was that following India joining the WTO, the future will see India revising the Patent Act to be in conformity with the TRIPS. So it will be useful for our scientists to know how the court will decide patent cases in future. In compiling the cases, the Institute had assembled about 150 cases from many countries and in particular USA, UK, Australia and European countries. All cases were summarised under the headings: Issues involved, facts of the case, decisions of courts and Institute's observations. The draft report containing 105 cases were submitted to the Ministry. The final report taking into account the observations at the monitoring committee meeting, was submitted completing the project.

12.

A report titled "Probing Emerging Issues in Intellectual Property Rights in Biotechnology" was submitted in February 2000 to the Department of Biotechnology.

The report contains six parts. The first part is a Preamble, explaining special aspects of patenting biotech inventions as well as the emerging scenario in the world, particularly covering Japan, USA and EPO. Part 2 deals with Patentability in Biotechnology leading upto aspects on patenting life and providing typical recent decisions in the courts and texts and examples of recent patents. Part 3 deals with the Concepts and Practices relating to Broad Patenting. Two recent examples and a recent patent on cloning are provided. Part 4 deals with Patenting on Microorganisms. Part 5 deals with Genetically Engineered Plants and Part 6 is on Patenting in Pharmaceuticals and Drugs. This part provides information on protection of confidential information as well as emerging trends in the field of drugs and pharmaceuticals.

1.

The study assigned by DSIR and titled "Emerging Issues in the Domain of Trade Secrets, Designs and Trademarks" was completed and the report was submitted to DSIR in May, 2000.

The Institute completed a report titled "Valuation of Intellectual Property Rights in Technology Management" and submitted the same in December, 2000 to DSIR. This report examines the concepts relating to intangible assets and typical country perceptions in many countries. It identifies a large number of practical situations in which valuation of Intellectual Property will be of special interest. It also provides the recent theoretical economic models in the valuation of IPR. The report concludes listing over 25 cases on different aspects of intellectual property and introducing the concepts of a patent score card.

This report contains important case decisions settled in various courts of law on different aspects of trade secrets protection. The report addresses some of the emerging issues in the field of trade secret, particularly, in the context of employer - employee relationship, economic espionage etc. In India, though there is no specific law on trade secret yet concerns have been expressed about this emerging issue. There is appreciation on the necessity and usefulness of this law for some time in the recent past.

. In this compilation, over 100 cases are grouped into eleven chapters. The eleven chapters are:

What can be a trade secret?

What is not a trade secret?

Measures to ensure secrecy

Misappropriation

Restraints and covenants

Inevitable disclosure

Injunction

Damages

Jurisdiction

Liability

Others - legal aspects.

Trade Secret, which is still in its infancy in India, encompasses several aspects and has myriad implications. Several cases pertaining to Trade Secret were studied in detail and the points of interpretations have been extracted so as to enable an analysis of the nature, definition, kind of damages available, liability, jurisdiction, and other aspects of Trade Secret.

The first chapter deals with what can be a Trade Secret? It points out topics such as customers' list, patent standard of novelty, contributory factors, interrelationship of components, and unique business elements.

For an easier understanding of the issue, one can first consider the definition of Trade Secret as interpreted in about 10 cases dealt with by courts in different states in the US.

For a plaintiff to have cause of action in a trade secret claim, the following should be noted:

there should be a certain valuable information, which may include a device, technique, method, programme etc.;

this is preserved with care by the plaintiff and is independent of economic value;

this is not ascertainable readily by proper means by others;

economic value is obtained from its disclosure or use.

misappropriation of the information by the defendant should be proved.

In other words, that information should have been wilfully used by the defendant in breach of trust vis-a-vis the plaintiff. Any information available readily to the general public through publications etc cannot be treated as a trade secret.

An exclusive customer list maintained with care and secrecy, if used or disclosed by former employees of a plaintiff company without due permission can call for trade secret protection. The customer list or details pertaining to it could have been misappropriated in any form - viz, either by memorisation or by any tangible method as in a piece of paper, a computer disk, a parchment or others. Therefore the nature of information stolen is important, and not the method of misappropriation.

A restrictive covenant forbidding a former employee from using a trade secret of the plaintiff company is valid only in respect of tangible information and not in respect of information lying in the memory of the defendant acquired over a period of time. But there is a difference of opinion among some state courts on this issue. While some states protect only tangible customer lists or other secrets in written or in other tangible form, some other states protect misappropriated valuable information even if stored in memory by the defendants. The Supreme Court, Washington, held in Ed Nowogroski Insurance Inc vs Rucker, 1999, that the Uniform Trade Secrets Act does not distinguish between written and memorised information.

Where two issues of trade secret and copyright protection are involved in the same case, double recovery is not allowed. Coextensive claims cannot be made. For trade secret protection to be made available, the information must be novel to the extent that it is not common knowledge. But novelty tests here need not have the high standards required by patent law.

In another interesting case, the Illinois District Court decided that the interrelationship of the components of information, technology, idea, process etc, can successfully call for trade secret protection, even if each individual component is in the public domain (Thermodyne Food Service Products Inc vs AFTEC Inc, 1996). In other words, how the components are woven together to get an end product can fall under the definition of a trade secret. But state trade secret law cannot bar reverse engineering or independent discovery so long as the trade secret is discovered by legitimate means. An information is in public domain if no intellectual property laws like, patents, copyright or trade secret protect it.

Chapter II deals with what is not a trade secret and includes topics such as: information disclosed publicly, easily obtainable business information, realm of general knowledge and skills, validly bargained information, recollection of business system, effluent data of a firm, pricing information in a bid to government.

When an invention or information etc., is patented, it falls into public domain and hence ceases to be a trade secret. This would hold good even if the parties to a trade secret case were not aware of the patent, at the time of disclosure of the information. Hence, information acquired by a former employee in the ordinary course of business, unaware of the patent would not be a trade secret, as it would still be public knowledge.

The question whether a public office can have its own protected secret was answered in The State ex rel. REA et al vs Ohio Department of Education et al, 1997. Here, the US Supreme Court, Ohio held that 'the protection of competitive advantage in private, not public business underpins trade secret law'' Here, when the State University developed a method to evaluate the students, this was effectively 'disseminated into the public domain', and hence was not a trade secret.

Customer lists and confidential business information cannot be trade secrets if they can be easily obtained, without great difficulty through some independent source other than the trade secret holder. Thus, information falling in the realm of general skills, knowledge and judgement cannot be trade secrets.

A trade secret claim cannot sustain itself if barred by the Statute of Limitations. The California Uniform Trade Secret Act prescribes a three-year limitation period, beginning from the time the misappropriation 'is discovered or by due diligence should have been discovered'.

The use or disclosure of information about a former employer's customers or details based on casual memory is not actionable. The acquisition of the information by improper means need to be proved for sustaining a claim for protection of that information. The specificities of a trade secret claim are to be clearly defined for sustaining it. They are not to be narrowed down as the case progresses. In an interesting Illinois case, the plaintiff alleged that a certain dye for industrial purpose was created and that the dye itself as well as the knowledge behind it were trade secrets. But the court held that the claim was too broad.

In RSR Corp vs EPA, (2nd Cir 1997), the Court decided that reports disclosing effluent data are not considered confidential business data and hence cannot get trade secret protection.

With regard to protectability of pricing information in a bid to Government, there were precedents expressing a range of opinions. However, in Martin Marietta Corporation vs Dalton, 1997, the Court took the view that the government should not reveal communication or financial information only if its disclosure would be likely to:

impair government's ability to obtain such information in future; and

cause substantial harm to the competitive position of source submitting the information

The use of logic in analysis of the definition of a trade secret would preclude old and ancient concepts from trade secret protection. In Todd & Noah's At Inc vs Enesco Corporation, Biblical concepts were interpreted and presented to a giftware marketer, only to be found that before the realisation of the contract, many such interpretations were marketed. Court held that the concepts were ancient and were already disclosed publicly.

. Another important case further narrows down the definition of a trade secret. It was held that readily observable items in wide circulation cannot claim trade secrets status. In Nora Beverages Inc vs Perrier Group of America Inc. 1998, the plaintiff alleged that the defendant had copied the bottle that they used for their own mineral water. The claim was dismissed on the ground that such tangible information as details of a bottle, is easily discernible from observation of a market place and does not require improper means for such acquisition. Relief in such a case could only be sought under other intellectual property laws.

Chapter III deals with measure to ensure secrecy and includes topics, such as: a preventable tragedy, inadequate measures, confidentiality agreement, sealing of documents, good cause with specific reasons, protective order and internet secrecy.

A critical test for secrecy is how far a trade secret holder has taken measure to protect his trade secret. Whether information was treated as confidential from the very beginning, whether adequate steps were taken to prevent an automatic dissemination of that information and so on. If defendant can disprove either of the above the plaintiff's claim falls. By adequate steps is meant reasonable steps and not absolute steps. A supplier of parts to a manufacturer of equipment's built up a substantial inventory of the latter's parts. The plaintiff's drawings and specifications, lying at the disposal of the defendant did indeed constitute trade secrets, but, however, it was found that reasonable measures to protect them were not taken. Whether reasonable precautions were taken is decided on a case to case basis.

In Glaxo Inc vs Novopharm Ltd., 1996, an important procedural aspect came to light. In this case, the trial court held inter-alia that where a party had allowed its information to be used as exhibits in previous trials without extra care to seal it or handle it in camera, such information to be used as exhibits in a case, must secure a protective order. In doing so, the applicant must spell out the extent of information to be protected, rendering justifications for the same. The party seeking production of sensitive information must prove to the court that there is reasonable necessity for such production. The court has substantial discretion to decide the extent of the information to be protected, to frame the order. An abuse of such discretionary power by the court is subject to review by the appellate court.

The fate of information posted in the interest is very important in today's context. Once a trade secret is posted on the internet, it is effectively part of the public domain and becomes impossible to retrieve. Although a person originally posting the trade secret on the internet may be liable for trade secret misappropriation, a person merely downloading it is not guilty of trade secret misappropriation. There is no misconduct in interacting with the internet.

Chapter IV deals with misappropriation and includes topics, such as: Memorisation, Damage or Injunction, Contracting Evidence, and Role of Employees Hand Book in Evidence.

The element of misappropriation, which is indispensable in a trade secret claim, does indeed have several areas shaded in grey. Due diligence is to be exercised in ascertaining the existence of misappropriation in a case. This would have to largely be done on a case to case basis. However, a study of certain precedents can always clarify perception on this. In a case where a license agreement is signed between two parties and a certain payment is made for use of the trade secret in question, the use of the trade secret other than the purpose fixed/agreed to earlier, can call for liability to be imposed.

In Stampede Tool Warehouse Inc vs Mark May et al, 1995, memorisation has been held as a method of misappropriation. Memorisation to rebuild a trade secret does not transform a trade secret from confidential to non-confidential information.

Where a confidential agreement is signed, even in the absence of a 'non-compete clause', the court can enjoin by injunction, a former employee from working for a competitor agency for a period of one year or so. This way, the actual or threatened misappropriation of trade secret may be enjoined. In a famous case, PepsiCo Inc. vs Redmond, the court enjoined PepsiCo's former managerial employee from assuming duties with competitor, due to the sensitive nature of trade secret information known to the employee.

Where a former employee returned certain documents containing trade secret, only after a case was instituted against him, the owner can only claim damages after trial but not get injunction restraining the former employee from working in a new agency, as it was established that the owner had not taken enough precautions to protect his data.

Indirect and insufficient evidence cannot allow presumption of matters of law. Even if doubts are raised, such evidence is not enough to make a reasonable conclusion. There must be evidence of injury or likelihood of injury.

Misappropriation means more than simply using knowledge gained through a variety of experiences. Preliminary negotiations, which are essential for commercial evaluations for amalgamations, partnerships and so on, need not end in a commitment to purchase. Information gained in this way cannot call for claim.

The most common form of misappropriation of trade secret takes place when employees move over to new employment. In the absence of specific contracts individually restraining an employee, in some cases, the hand book of employees can be relied upon to a certain extent to adduce evidence to prove misappropriation. Thus the employee hand book can in certain cases serve as an employment contract if it states on its face that the employee and employer agree to the terms of the contract.

Chapter V deals with restrains and covenants and includes topics, such as Restrictive Covenants in Franchise Agreement, Legitimate Business Interest, Enforceability of Restrictive Covenants, Definition of Confidential and Trade Secret Information, Reasonability of Restraints and Importance of Employer's Interest.

To have safeguards, employers also use restraints and covenants, like non-compete agreements, by which the employee is bound not to disclose trade secrets to his new employer. But this is not without restraints. A restrictive covenant bearing such a noncompete clause for a certain period of time, within a certain radius of space would be valid in a franchise agreement, if the agreement's main purpose is to protect a trade secret. Further, such a covenant can even bar a non-signatory to the covenant, if such third person acts in concert with a covenantor to do what the latter could not do directly.

But Servopro Industries Inc vs Schmidt, 1997, clarifies a point here. The enforcement of a covenant is possible only and only if there is a "legitimate business interest" to be protected under the trade secret act. "Goodwill" in a franchise relationship is not a protectable interest. In general, equity does not allow a contract that restraints a party from engaging in a lawful profession, business or trade. But partial restrictive covenants are enforceable in many states like California. A defendant can be barred from trading with a certain specific segment of clientele, which would potentially harm the plaintiff. Similarly, certain areas of activity in question can be divided into protectable trade secret or otherwise; and accordingly injunctions or other reliefs can be sought in respect of such protectable activities.

Where an employer spends amount of money in offering special training to employees to establish customer relationships, restrictive covenants can protect the employer's customer relationship. This is because the employee in this case, a recipient of such specialised training is in a position to solicit directly and thus inure the employer. However, special training or peculiar knowledge should be distinguished from subjective knowledge or general skills gained at work, in respect of which restraints cannot be imposed.

However, there are checks on the kinds of restrictive covenants. Restrains, too broad are not valid. When an employment agreement contained the restrictions: (a) non-compete; (b) non-disclosure; and (c) non-solicitation, the court considered such a covenant too broad, leaving no scope for an employee to earn his livelihood reasonably.

Sometimes non-compete covenants are questioned vis-ŕ-vis the fundamental public policy. In Lowry Computer Products Inc vs L Head, 1997, the parties to the trade secret claim sought jurisdiction of different states for the enforcement of the restrictive covenant in relation to the public policy of that respective state. Jurisdiction itself is to be decided depending on which state has greater interest in the instant case. The question assumes greater complexity if foreigners are involved.

. Employment agreement containing non-compete clause is not assignable. If there is a difference between old and new management of an organisation, an employee bound by old covenants cannot be forced to agree to new covenants of new management. Old covenants are not assignable to a new management.

Chapter VI deals with inevitable disclosure and includes topics, such as: application to doctrine of inevitable disclosure, applicability to injunction, and information giving head start.

When circumstances indicate that a former employee would certainly disclose a trade secret to the new employer the doctrine of inevitable disclosure can be brought to use. This doctrine is a recent phenomenon and gives injunctive relief to protect a plaintiff against threatened disclosure of trade secret. A plaintiff can prevent his former employee from working for a new employer if he can prove that: (a) the former employee knows the plaintiff's secret, (b) the new job is similar to the old one and there is likelihood of disclosure of secrets, and (c) there is evidence to show that former employee and new employer cannot avoid using the trade secret.

A landmark case which gives significance to this doctrine is PepsiCo Inc vs Redmond, 1995. Here PepsiCo's manager resigned and joined competitor Quaker Oats. Having dealt with strategic information in PepsiCo the issue raised was that Redmond would consciously or unconsciously divulge trade secrets. Here the court granted injunction preventing Redmond from joining the new employment.

However, there is some contradiction surrounding the use of this doctrine. Some courts opine that workers should not be prevented from pursuing better livelihood due to hypothetical apprehensions of trade secret misappropriation.

The doctrine of inevitable disclosure can be used even if there is threatened injury. Injunction can be granted in respect of certain segments of work in new employment, and not necessarily the whole. Trade secrets consist of two classes of information. Those that work and those that do not work. Negative information is equally important in providing a competitor a headstart in business affairs. The doctrine can be applicable in all such cases.

Chapter VII deals with injunction and includes topics, such as: restraints on using specific information, effects of missing agreement, irreparable damage, injury and remedy, delay in seeking remedy, posting of bonds and drafting orders.

. An analysis of the injunction as a preliminary relief is very important. The showing of irreparable harm to the plaintiff is usually considered the single most important requirement in determining whether or not to issue a preliminary injunction. An irreparable injury cannot be addressed adequately through a monetary award. Such injury exists when unfair competition deprives the initial producer of a fair opportunity to market its product. Such injury can result where bonafide opportunities are blocked by malafide means. Potential loss of advantage of being a pioneer in a field and a market leader constitutes irreparable harm.

. Where a new employer had offered to indemnify the defendant employee from any claims made by the plaintiff for breach of trust agreement, and where bonus was offered as added incentive, the employee was prevented from taking up employment in the new organisation as there was clear motive to injure the plaintiff. In an another instance, even the missing of the non-disclosure-non-compete agreement from the personal file of the defendant employee did not prevent the court from granting an injunction in favour of the plaintiff. So long as there is proof of reasonable precaution from the plaintiff, the defendant is still bound to maintain the secrecy of information in question.

To provide real protection in situations in which the competing company uses the creator's trade secrets to concurrently develop a similar product, injunctive relief beyond the date when the creator company would publicise its product, is an appropriate remedy. Thus injunctions cold be granted upto the validity of a confidence agreement or in its absence, upto the time that would be taken to develop such knowledge without using the trade secret.

In an interesting case, Multiform Dessicants vs Sullivan, 1996, the non-compete-non disclosure agreement had expired and theft of the trade secret had already occurred. It was presumed that disclosure to the new employment would have already taken place but in the defendant's own interest, public disclosure was not expected. Here injunction was not granted as theft had already taken place. This means that preliminary injunction will not be issued where a loss cannot be prevented or remedied by such issue. A prayer for injunctive relief would also be weakened if there is undue delay in seeking such relief from the part of the plaintiff. Further, if terms of an injunction are too broad, and ambigious, the appellate court could reverse such injunctive order on those grounds.

Chapter VIII deals with damages and includes topics, such as: Exemplary Damages, Punitive Damages, Misappropriation without Malice, Claims in Good/Bad Faiths, Enforcement Hurdles, and Arbitration Award.

Where a misappropriation claim has been proved, the court can award damages taking into consideration various factors. In some states in the US, the plaintiff can obtain damages for both actual loss sustained as well as unjust enrichment caused by the misappropriation. Court can also award prejudgement interest as a matter of fairness and equity. However, the rate of interest is left to the discretion of the court.

. A prejudgement interest award holds defendant accountable for the entire benefit it derived from unlawful use of Plaintiff's intellectual property. Unjust enrichment is not considered when computing loss. Punitive damages are awarded when misappropriation is willful and malicious. An employer who restrains an employee from taking another job under doctrine of inevitable disclosure may have to pay damages to employee if action fails. However, he is not liable to pay exemplary or punitive damages if he has reasonable basis for his actions.

In Roton Barrier Inc vs Stanley Works, the Circuit Court draws distinction between motivated misappropriation and motivation by competition. In the latter exemplary damages are not recoverable. Misappropriation does not require that a party use a trade secret in the same form in which it is disclosed. The test is one of substantial similarity. Distinction is made between negligent misappropriation and one with malice and illwill. Obviously the later will call for higher damages.

A plaintiff is said to have acted in bad faith if he could have known that his claim had no chance of success under existing law. Such a claim is not even triable being initiated in bad faith (e.g. if plaintiff knew that all areas of the trade secret in question were common knowledge).

If a charge of misappropriation fails a plaintiff cannot be counter-attacked for bad faith in bringing a suit if the plaintiff had bonafide reason to make his claim. A defendant can ask for his attorney's fees if he can prove beyond reasonable doubt the malafide intentions of a plaintiff. A plaintiff initiating action inspite of knowing that the subject matter of the claim was in public domain is said to have done so in bad faith. While the defendant asking for attorney's fees should prove bad faith of the plaintiff, the plaintiff could defend himself by justifying his pursuit of statutory cause of action.

Similarly, a party who establishes that he has been wrongfully restrained has a right to recover damages "which are the actual result of such wrongful injunction". These damages include compensation for injury and attorney's fees.

A party seeking a preliminary injunction and succeeding in the same posts a bond for compliance. Later if injunction is vacated he may face a counter attack for recovery on grounds of bad faith. However, such recovery is limited to the bond.

A non-competition agreement could provide for arbitration clause. Arbitrators are judges of both law and fact. An Award will not be vacated or modified unless the arbitrator's adoption of erroneous rule or mistake in applying law is proved.

Chapter IX deals with Jurisdiction and includes topics, such as: Forum, Area where it Hurts, Transfer of Venue, and Reasonable Exercise of Personal Jurisdiction.

A variety of factors affect the question of jurisdiction in trade secret claims. A lot of importance is given to public interest and private interest factors. The enforceability of judgements in another country would depend on whether there exists understanding between the two countries.

In cases involving foreign countries, defendants can claim immunity under Foreign Sovereign Immunities Act which sets forth a comprehensive set of legal standards governing claims of immunity in any civil action against a foreign state or its agencies.

In deciding jurisdiction, it was held in some cases, that the area where the owner of trade secret had his headquarters was clearly the focal point of the alleged misappropriation and also where the injury is most felt. According to certain other opinions, the law of the place where the alleged wrong was committed or the benefit was obtained would apply. Often, it would suffice to show that injuries were inflicted in a certain judicial district to assure jurisdiction of that district.

. A motion for transfer of venue in trade secret claims shall be entertained after considering certain factors as for example: (a) Burden on defendant; (b) Interests of the forum; (c) Interests of plaintiff; (d) Procedural and substantive policies of other nations whose interests are affected; and (e) Judicial convenience.

Chapter X deals with liability and includes topics, such as: Doctrine "Respondent Superior", employer's responsibility, liability of foreign signatory, liability of Attorney, and financier's involvement.

When a third party seeks to hold a corporation liable for a tort committed by an employee, the doctrine of "Respondent Superior" applies. This doctrine applies to common law torts to a great extent. It is based on the principle of vicarious liability.

The UTSA (Uniform Trade Secrets Act) bars use of trade secret "by a person who knows or has reason to know that the trade secret in question was acquired by improper means". Thus an employer is said to misappropriate information when he knowingly reaps the benefits of his employees "or agents" conversion of trade secrets from a former employer. Where a new employer lures employees of an another company by offering bonus, or compensation for certain eventualities, or even pumps in a lot of money for developing new plans, and technology, etc., based on stolen information, he would be considered to have acted in bad faith. However, legally secured information is protectable and shall not lead to claims.

An attorney is liable for unauthorised disclosure of documents in trade secret cases, if he had done so on conditions of confidentiality. A restraint may be imposed if considered appropriate to prevent disclosure of information. But if relief cannot be sought until after secrecy was lost, injunctions are not resorted to.

. Chapter XI deals with other legal aspects and includes topics, such as: Judicial Economy, Grounds for Summary Judgement, Res-judicate, Contempt, Cause of Action, Limitation, and Criminal Offences.

Failure to comply with court order amounts to contempt of court. A party to a trade secret suit can bring action for criminal or civil contempt of court by furnishing concrete evidence to show the same. Substantial compliance with a court order may prevent a contempt finding. Even if there has been some effort to comply with court orders, a person may escape contempt proceedings pleading traditional defences of substantial compliance and inability to comply. In contempt cases a higher burden of proof beyond "reasonable doubt" has to be met.

70. The WITT is confident that the material compiled in the report, will provide a useful guide in the context of new development in the domain of trade secrets and in dealing with the emerging issues in the Indian situation.

This Report is presented in six chapters and seven annexures; and the broad coverage of these segments is briefly presented in the Preface.

Recalling the broad scope of this study the report had to address the major segments in an overlapping manner due to the rapidly changing appreciation of the interlinkage in the subject areas and the inputs that become available thereon. In view of this, this Executive Summary is structured keeping in view the need in correlating the contents of the different chapters in meeting the overall requirement envisioned in the scope of the study.

The study has brought out the available techniques for the valuation of intellectual property which are currently in use in many agencies whose primary function is to value such assets. In particular several policies had influenced these methods:

The cost based method which indicates the costs incurred in developing an intellectual property is by and large the easiest method to value an intellectual property but this suffers from several disadvantages in the allocation of the R&D expenditure of an organisation which eventually produces several outputs. The allocation of certain expenditure to a specific intellectual property is therefore riddled with very many estimates and some of them are very questionable.

The second method, known as market based methodology, is to assess the price at which comparable property transactions have taken place in the recent past and make suitable adjustments for the particular intellectual property in question. If adequate data can be gathered, this could be a useful and convenient method. Questions as to how far true values are reflected in a transaction and how much is covered under transfer pricing, poses problems on the credibility of the valuation reported by others.

The third popular method, called income based method, depends on assessing the future income such an intellectual property would provide and reducing it to its present value. Approximation of various types are needed for estimating a suitable discount rate on future income.

These three methods are therefore briefly summarised in the report. The fact that many countries of the world are not happy with the present status can be seen in the June 1999 report of Japan which has brought out a set of guidelines relating to patent related valuation indices.

Mention may also be made of the studies reported under the theoretical economic models which enable to assess the value of innovation and thereafter the value of intellectual property itself. These studies, arising from a very well known Institute specialising in economics, provide valuable guidance in making an effort to assess the value of intellectual property in a given situation.

The country perceptions from other countries reported in the Report also give guidance on assessing value of intellectual property in different situations.

However, it may be recalled that the true value of an intellectual property asset is the price a willing buyer is ready to pay and a willing seller is ready to accept. This is not a definite value, and can be negotiated. WITT had in a previous paper reported that all methods are useful in starting this negotiation.

This report would still emphasise that a unique method for all situations does not exist; a method which will be suitable in a given situation can only be judged by the particular situation involved.

However, firms which are concerned with reporting intellectual property assets may use the market method in many situations. Academic institutions trying to sell technology through intellectual property rights may start with the cost method. Companies involved in mergers and acquisitions may prefer to use the income method in the context of a new organisational set up. Government agencies trying to even out problems due to monopoly rights conferred may prefer to use the methods indicated in a patent buyout strategy. Agencies trying to determine the value of intellectual property in infringement situations may perhaps use concepts relating to unfair enrichment or concept of lost income and may perhaps adapt the concepts indicated in the potential of intellectual property for injunction and damages.

The Report has relied upon a large number of reported cases and in addition 26 cases have been reported in Chapter V. Several cases have been referred to in dealing with the topics of special interest. Even in dealing with country perceptions a large number of cases have been cited in different countries. In the light of the wide range of special features of importance in a particular case, an effort has been made to classify them in several groups in the report. It is felt that the present compilation will thus provide some generic assistance in a particular situation though several other such cases may have to be consulted or collected in properly assessing the value in a particular situation.

The technology transfer normally covers several sub-areas, like technology sourcing, technology assessment, technology selection and other arrangements in the technology management area itself. In order to give a brief overview of such a position, the report presents some considerations relating to technology assessment. The motivation for technology assessment therein, the price of new technology, the factors affecting the technology price, payment consideration for technology as well as a few practical considerations are briefly presented.

In the field of technology sourcing, a broad inference from the report seems to indicate that internet could play an important role in assessing the technological strength of a company in which intellectual property is an important component. This is partly reflected in the presentations made in the study on patent score card. Further, the possibility of obtaining assistance in the technology sourcing domain could be seen in effective intellectual property exchanges that are coming up in many countries and to which accesses may be possible somewhat easily through the internet system.

Relating to technology assessment the possibility of locating companies and accessing the patent portfolio is an important new development. The recognition of such portfolio as a strategic asset is indeed a useful starting point for probing their related strengths. Two of the annexures provided in the report concentrate specially on such an assessment either through a number of patents in a country, the key personnel who are involved in the development, the countries in which patens of a company are being taken as well as determining the technological assessment reflected in the patent score card. An example relating to software reported in the study also is a pointer in this process of technological assessment.

The technology selection can considerably be assisted by assessing the intellectual property strength of a company. This becomes particularly critical in seeking alliances, in dealing with issues of mergers and acquisitions and examining options of cross licensing as well as consolidating patents pools. The report has pointed out that in technological applications very often an enterprise will need more than one patent and as such a sequential form of obtaining patent licencing could lead to excessive price demands in the later stages, that is the first few patents may be obtained at market value but later on a few patents may become available only on payment of exorbitant fees since their owners will become aware of the critical need of their patent facilities to complete the package.

Certain other areas of technology management are highlighted in the report broadly covering the possibility of covering intellectual property protection with insurance arrangements.