Protecting Trade Secrets in India Without a Trade Secrets Act

India has no standalone trade secrets statute. Trade secret protection in India is assembled from three other sources: a properly drafted contract, the equitable action for breach of confidence that Indian courts have applied since the 1960s, and statutory hooks in the Information Technology Act, 2000 and the criminal law. Courts will restrain a former employee or a vendor from using genuinely secret, commercially valuable information, but only if you identify that information precisely, and they will not enforce a bare post-employment non-compete however carefully drafted.

The gap between what a business assumes it owns and what a court will protect is where most of these disputes are decided, usually in the pleadings.

Why there is no Trade Secrets Act, and what stands in its place

India is a WTO member, and Article 39 of the TRIPS Agreement requires members to let persons prevent undisclosed information lawfully within their control from being disclosed, acquired or used in a manner contrary to honest commercial practices. India has discharged that obligation through general law rather than a dedicated code.

The 22nd Law Commission of India examined the position in its 289th Report, "Trade Secrets and Economic Espionage", released on 5 March 2024. It recommended a dedicated statute and annexed a draft Protection of Trade Secrets Bill, with carve outs for whistleblowers, compulsory licensing and government use, and the public interest. That has not yet resulted in an enacted law, so the framework below is the one you plead and defend today.

Key takeaway. The absence of a statute does not mean the absence of a remedy. Indian courts grant injunctions in confidential information cases regularly. What they will not do is fill in the blanks for a claimant who has not defined the secret, shown how it was kept secret, or shown what the defendant took.

How trade secret protection in India actually works: the four routes

Every trade secret claim runs down one or more of four tracks, and most well built cases use at least two at once, because each has a hole the others cover.

Section 72A of the Information Technology Act, 2000 is under used. It punishes anyone, including an intermediary, who secures access to material containing personal information while providing services under a lawful contract and then discloses it without consent or in breach of that contract, knowing it is likely to cause wrongful loss or gain, with up to three years, a fine up to five lakh rupees, or both.

What Indian courts treat as a protectable trade secret

Indian courts apply a three limb enquiry. Does the information have the necessary quality of confidence, meaning it is not public property or public knowledge. Was it imparted in circumstances importing an obligation of confidence. And has it been used without authority, to the detriment of the party who communicated it.

The three limbs are cumulative, and the first of them defeats most claims.

The first limb does most of the killing. In Navigators Logistics Ltd v. Kashif Qureshi, decided by the Delhi High Court on 17 September 2018, the court rejected a claim built on customer lists and databases because the names and contact addresses of businesses in that trade were freely available in the public domain. The plaint spoke of research processes and financial and administrative matters in general terms, and the court held that such phrasing did not satisfy the requirements of pleading at all. The suit was dismissed in its entirety.

Three rules follow. Information an employee can reconstruct from memory and general skill is rarely protectable. Compilations qualify only where selection or enrichment produced value beyond the raw entries. And information the company circulated without restriction and allowed onto personal devices was not treated as secret by the company either.

Common mistake. Pleading "confidential information, trade secrets, know-how and business methods" as a block, without identifying a single document, file path, formula or customer term. Courts read that as a bid for a roving injunction, and it invites dismissal rather than an adjournment to particularise.

Section 27 of the Contract Act: confidentiality survives, non-compete does not

Section 27 of the Indian Contract Act, 1872 voids every agreement by which anyone is restrained from exercising a lawful profession, trade or business, save for the statutory exception on sale of goodwill. Indian courts have refused to read an English style reasonableness test into it.

The two Supreme Court anchors sit on either side of the employment date. In Niranjan Shankar Golikari v. The Century Spinning and Manufacturing Co. Ltd., decided on 17 January 1967, the Court upheld a negative covenant operating during the employment, on the footing that a restraint operating while the contract is alive is generally not a restraint of trade at all. In Superintendence Company of India (P) Ltd. v. Krishan Murgai, decided on 9 May 1980, the Court dealt with a restraint operating after service ended.

The current statement from the Delhi High Court is Varun Tyagi v. Daffodil Software Private Limited, FAO 167/2025, decided on 25 June 2025 by Justice Tejas Karia. The court held that a term restricting the employee's right to be employed after termination is void, that partial restraint and reasonableness do not save it, and that an employer cannot use a confidentiality concern as the vehicle for a bar on working. Confidentiality obligations can survive employment; a bar on working for a competitor cannot.

What to do in the first days after you suspect misappropriation

1. Stop the destruction of evidence. Do not reimage, reissue or wipe the departing employee's laptop and do not purge the mailbox. Preserve access logs, VPN logs, USB mount records, print logs, cloud sync history and the mail journal under a written litigation hold.
2. Take a forensic image, not a copy. Use a qualified examiner, record the hash, and obtain the certificate for electronic records under section 63 of the Bharatiya Sakshya Adhiniyam, 2023 (formerly section 65B of the Indian Evidence Act, 1872) at the time of collection.
3. Define the secret on paper. Schedule each item, where it was stored, who had access, what restriction applied and what its commercial value is. If that schedule cannot be produced internally, the case is not ready to be filed.
4. Map what the defendant took and used. Tie specific files to specific exfiltration events and, where possible, to a competing pitch or customer approach. A claim that stops at access rarely holds.
5. Send a calibrated notice identifying the information, the obligations relied on and the preservation demand. Do not overstate it; the other side will annex it.
6. Choose the forum and deal with pre-institution mediation. Section 12A of the Commercial Courts Act, 2015 requires it for commercial disputes unless the suit contemplates urgent interim relief, and in M/s Patil Automation Private Limited v. Rakheja Engineers Private Limited, decided on 17 August 2022, the Supreme Court treated the requirement as mandatory. The urgency must be real and pleaded.
7. Frame the interim application tightly. Relief under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 must be specific and policeable, and where devices need securing, consider a local commissioner under Order 26 Rule 9 CPC.
8. Keep the criminal route in reserve. A complaint under section 316 BNS or the IT Act can be appropriate, but a thin one filed for pressure resurfaces as an allegation of malicious prosecution.

Four of those steps carry most of the weight in the first fortnight.

Deadline warning. Interim relief here turns heavily on promptness. Several months between discovering the exfiltration and moving the court invites the argument that the information was never really treated as secret and that damages are an adequate remedy. Server logs also age out on standard retention cycles, so the preservation instruction cannot wait for a decision on whether to litigate.

Indicative cost and timeline

The ranges below are indicative only. They vary with the forum, the volume of electronic evidence and the conduct of the other side, and none of it is a quotation. A confidentiality programme review for a mid sized company, covering templates, classification policy and exit process, typically runs from a few tens of thousands of rupees into a few lakh depending on headcount. Forensic imaging with a preliminary report commonly costs tens of thousands of rupees per device, rising sharply where mobile devices or deleted-file recovery are involved. A commercial suit attracts court fees on the suit valuation, which in a damages claim can be substantial.

An urgent interim application is usually listed within days to a few weeks of filing, and a contested injunction is often decided within a few months. Trial runs for years rather than months, which is why the interim stage carries most of the commercial weight.

Building a programme that survives cross-examination

The strongest evidence in a trade secret case is rarely the agreement. It is the paper trail showing the company behaved as though the information was secret before the dispute arose: a classification policy that distinguishes tiers, need to know access with logs retained, marking on documents, restrictions on personal cloud accounts and removable media, and an exit process with a device return receipt and a signed acknowledgement of surviving obligations.

Coverage should extend beyond employees to contractors, consultants, vendors and prospective investors, using the same defined categories throughout. A clause describing protected information one way in the employment contract and another in the vendor agreement hands the defence an easy point. For the drafting mechanics see our notes on drafting an NDA in India and on employment agreements and the clauses that actually bind. Founders building a strategy from scratch will find the wider picture in IP protection for startups, and our work in this area sits on the intellectual property law page.

One structural decision deserves board level attention. Where an invention can be patented, the choice between filing and keeping it secret is not reversible in practice. A patent buys a term limited monopoly in exchange for full disclosure, while a trade secret can last indefinitely but confers nothing against independent discovery or lawful reverse engineering. Manufacturing parameters and internal tooling often belong in the secrecy column; products a competitor can take apart do not.

A note from practice

The pattern that recurs here is not theft by a mastermind. It is an ordinary resignation, a routine folder sync to a personal drive during the notice period, and an employer who finds out two months later that a competitor is quoting the same terms to the same three customers. By then the laptop has been wiped and reissued, the logs have rolled over, and the only surviving document is a two page appointment letter promising the employee will keep company information confidential. That clause is being asked to do work it was never built for. The businesses that come out of these disputes well had already decided, in writing and in a quiet year, which twenty documents genuinely mattered and who was allowed near them.

Related guides and where to get help

If this is a live problem rather than background reading, our intellectual property practice handles these matters from Bengaluru, including for clients who cannot attend court in person. These guides go deeper on the neighbouring questions:

• IP Protection for Startups in India: A Founder's Guide
• Personality Rights in India: Protecting Your Name & Image
• Personality Rights Injunction: Protecting Name & Likeness

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Published for general information and legal education. This is not legal advice and creates no lawyer client relationship.