Judicial Perspectives on Trade Secrets Protection in India

India does not have a standalone statute dedicated to the protection of trade secrets. Yet, businesses, employers, and employees routinely deal with disputes involving confidential processes, customer databases, proprietary know-how, and sensitive business strategies. In the absence of dedicated legislation, it has fallen squarely on the shoulders of the Indian judiciary to define the contours of trade secret protection – primarily through case law rooted in contract law, equity, and intellectual property principles. Over the decades, the Supreme Court and various High Courts have built a rich, if uncodified, body of jurisprudence that continues to govern this area of law.

The foundational challenge: no dedicated trade secrets law 🔗

The starting point for understanding the judicial approach is appreciating the legal gap itself. Unlike patents, trademarks, or copyrights, trade secrets in India are not protected by any specific legislative framework. Disputes involving trade secrets fall within the broader category of “commercial disputes” under the Commercial Courts Act, 2015, and are adjudicated using a patchwork of the Indian Contract Act, 1872, the Copyright Act, 1957, and principles of equity derived largely from English common law.

Indian courts have also been guided by India’s obligations under the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights), which requires member nations to protect undisclosed information. To be recognised as a trade secret by Indian courts, the information must be confidential, must hold commercial value because of its secrecy, and the owner must have taken reasonable steps to keep it protected.

The Supreme Court’s landmark position: restrictive covenants and their limits 🔗

Superintendence Company of India (P) Ltd. v. Krishan Murgai (1980) 🔗

This is the single most consequential Supreme Court ruling on the subject. The appellant company – a valuation and survey firm – had developed proprietary testing techniques that it claimed constituted trade secrets. When a former employee set up a competing business after his services were terminated, the company sought an injunction and damages based on a restrictive covenant in his employment contract.

The Supreme Court held that under Section 27 of the Indian Contract Act, any post-service restrictive covenant that extends an obligation beyond the termination of employment is void. The Court was categorical: a service covenant cannot be enforced after the employment relationship ends, regardless of whether it is framed as partial or general in its reach. The Court further clarified that no Indian decision had granted an injunction against an employee after the termination of service solely on the basis of a non-compete clause.

However, the Court drew a critical distinction – while an employee cannot be prevented from applying their general skills and knowledge, a negative covenant specifically aimed at protecting genuine trade secrets and confidential information can be enforced even after employment ends. This distinction between general professional skill and specific proprietary knowledge became the cornerstone of all subsequent judicial reasoning in this field.

High Courts elaborate: confidentiality beyond employment contracts 🔗

Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber (1995) 🔗

This Delhi High Court decision extended trade secret protection into the domain of copyright law, addressing the question of whether a compiled customer database could be legally protected. The plaintiff, a mail-order company, had built a detailed customer database over three years through significant investment of time and money. A former employee allegedly copied this database and began using it to compete directly with the company.

The court held that such a compiled database qualifies as a literary work under copyright law, and that confidentiality and trade secret principles independently protect such data compilations. The evidence was compelling: the data on the defendant’s systems contained identical spelling errors and punctuation from the plaintiff’s original database, pointing to direct copying rather than independent compilation. The court granted an interim injunction, establishing the principle that information which would cause real or significant harm if disclosed to a competitor – including customer names and purchase histories – qualifies as a trade secret.

American Express Bank Ltd. v. Ms. Priya Puri (2006) 🔗

This Delhi High Court case brought the post-employment confidentiality debate into sharper focus within the banking sector. American Express Bank sought a permanent injunction against its former employee, Ms. Priya Puri, to prevent her from using or disclosing confidential information and from soliciting its customers after she resigned.

Relying heavily on the precedent set in Superintendence Company of India v. Krishan Murgai, the court dismissed the application. It held that post-employment restrictions aimed at restraining trade are void under Section 27 of the Indian Contract Act, unless they satisfy specific and narrow exceptions. Crucially, the court distinguished between general knowledge and experience – which an employee is always free to carry and use – and specific, identifiable trade secrets, which may still attract some protection. The judgment reinforced that an employer cannot simply label general professional familiarity as a “trade secret” to artificially extend control over a departing employee.

John Richard Brady v. Chemical Process Equipments P. Ltd. (AIR 1987 Delhi 372) 🔗

This case is significant because it extended trade secret protection beyond the employment contract framework entirely, invoking broader principles of equity. The plaintiff had invented a fodder production unit and shared technical drawings, specifications, and know-how with the defendant for the purpose of obtaining specialised components. When no order was placed and the defendant was later found to have built their own fodder unit using the shared information, the plaintiff sued for misappropriation.

The Delhi High Court granted an injunction even in the absence of a formal confidentiality contract, holding that trade secrets are protected against misuse by any party who may have a relationship with the claimant, irrespective of whether a contract exists, based on broad principles of equity. This ruling confirmed that the obligation to protect confidential information shared in a business relationship is not contingent on a written agreement – it arises from the nature of the relationship itself.

Modern judicial thinking: data, digital assets, and equity 🔗

Navigators Logistics Ltd. v. Kashif Qureshi (2018) 🔗

This case brought the trade secrets discourse into the digital age. Navigators Logistics, a freight forwarding company, sued twelve former employees for allegedly leaking proprietary data – including customer lists and internal communications – to a competing firm. The company’s claims rested on both copyright infringement and breach of confidentiality.

The Delhi High Court ruled against the employer on both grounds. The court found that the plaintiff failed to establish a valid copyright over the alleged trade secrets and confidential information, primarily because the data did not meet the statutory criteria for copyright protection. The non-compete clauses in the employment contracts were also struck down as being in violation of Section 27 of the Indian Contract Act. The judgment is a sharp reminder that businesses cannot use vague or broad contractual language to claim protection over information that does not genuinely qualify as confidential or original under the law.

Escorts Construction Equipment Ltd. v. Action Construction Equipment P. Ltd. 🔗

This case carried the principles from English law – specifically the three situations outlined in Saltman Engineering Co. Ltd. v. Campbell Engineering Co. Ltd. – into Indian jurisprudence on confidential information. The court, applying this framework, held that it is essential that the information in question be confidential, and that a formal contract is not always necessary to establish an obligation of non-disclosure. The three situations recognised are: first, where confidential information is exchanged and the contract is silent on its treatment; second, where the defendant obtained the information – directly or indirectly – with or without consent; and third, where a party receiving confidential information is bound to maintain secrecy regardless of whether any contract existed. Indian courts have consistently relied on this framework to extend protection in fiduciary and commercial relationships beyond formal employment settings.

The unifying thread: balancing business interests and individual freedom 🔗

Looking across these decisions, a coherent judicial philosophy emerges. Indian courts do not treat trade secret protection as absolute. They consistently balance two competing concerns: the legitimate interest of a business in protecting genuinely proprietary information, and the equally legitimate interest of individuals – particularly former employees – in pursuing their careers and applying their accumulated skills freely.

The courts have repeatedly struck down broad non-compete and non-disclosure clauses that attempt to prevent employees from simply doing their jobs, reserving protection only for identifiable, specific confidential information that provides real competitive advantage. This approach aligns with India’s position as a TRIPS signatory while ensuring that contract law is not weaponised to suppress fair competition or restrict the mobility of labour.

It is worth noting that trade secret protection lasts only as long as the secrecy is maintained – once the information enters the public domain, it loses its protected status entirely. This places the responsibility firmly on the information owner to actively maintain confidentiality, rather than relying on courts to retroactively create protection that was never established in practice.

What this means for businesses and legal practitioners 🔗

The judicial landscape sends a clear message to businesses operating in India. Proprietary information must be genuinely confidential, commercially valuable, and actively protected through reasonable measures – whether through well-drafted non-disclosure agreements, access controls, or confidentiality policies. Courts will not extend protection to information that an employer loosely labels as a “trade secret” without substantiating what makes it confidential and how it has been safeguarded.

For legal practitioners, these decisions underscore the importance of carefully drafting employment agreements that draw a precise distinction between general professional knowledge (which cannot be restricted) and specific proprietary information (which can). Post-employment covenants, to have any chance of surviving judicial scrutiny, must be narrowly tailored, clearly connected to a legitimate business interest, and must not overreach into the domain of an employee’s general competence and experience.

What do you think? Given that Indian courts have consistently refused to enforce broad post-employment restrictions even when businesses claim trade secret misappropriation, do you think the absence of a dedicated trade secrets statute weakens protection for Indian businesses – or does the current equity-based judicial approach strike a more appropriate balance? And should the obligation of confidentiality in a business relationship always require a written contract, or is equity-based protection sufficient in commercial dealings where trust forms the basis of information sharing?

References

1. https://www.anandandanand.com/news-insights/trade-secrets-2025/
2. https://rajendralawoffice.com/supreme-court-on-trade-secrets-protecting-business-innovations/
3. https://indiankanoon.org/doc/1186410/
4. https://www.casemine.com/judgement/in/56090a4fe4b0149711171e27
5. https://lawinsider.in/columns/trade-secret-and-its-protection
6. https://www.casemine.com/commentary/in/enforceability-of-post-employment-restrictive-covenants-under-indian-contract-law:-analysis-of-american-express-bank,-ltd.-v.-ms.-priya-puri/view
7. https://www.casemine.com/commentary/in/navigators-logistics-ltd.-v.-kashif-qureshi:-reinforcing-the-limits-of-copyright-and-confidentiality-in-employment-contracts/view
8. https://www.ipandlegalfilings.com/trade-secrets-protection-in-india-a-legal-vacuum-and-the-imperative-for-robust-legislation/
9. https://law.asia/employment-bonds-india/