Trade secrets have become one of the most valuable forms of intellectual property in modern business. In a rapidly evolving commercial environment where innovation, data, algorithms, business strategies, and technical know-how define competitive advantage, protecting confidential information has become critical. Trade secrets differ from patents, trademarks, and copyrights because they do not require registration. Their protection depends entirely on secrecy and contractual obligations. While many countries such as the United States have specific legislation like the Defend Trade Secrets Act, India does not have a dedicated statute governing trade secrets. Instead, trade secrets in India are protected through common law principles, contractual agreements, fiduciary obligations, and equitable doctrines such as breach of confidence.

Despite the absence of a statutory framework, Indian courts have played a transformative role in recognising and safeguarding trade secrets. Through judicial interpretation, courts have laid down principles on what constitutes confidential information, how trade secrets are protected, what remedies are available, and when disclosure may be justified. Landmark judgments have shaped the legal landscape and demonstrated the judiciary’s willingness to protect confidential commercial information. This article examines some of the most important Indian case laws relating to trade secrets and analyses how these decisions have influenced the development of trade secret jurisprudence in India.

The Legal Framework for Trade Secrets in India

Trade secrets are protected primarily through contract law, equity, common law principles, and the Indian Contract Act, 1872. Section 10 of the Act recognises that agreements supported by free consent and lawful consideration are enforceable. Confidentiality agreements, non-compete clauses, and non-disclosure agreements (NDAs) fall under contractual arrangements that create obligations of secrecy. Section 27 of the Contract Act, which restricts agreements in restraint of trade, plays an important role in determining the enforceability of non-compete clauses. However, confidentiality clauses are treated differently from non-compete agreements because they protect proprietary information rather than restrict trade. Courts have repeatedly clarified that confidentiality obligations do not violate Section 27 since they prevent misuse of information rather than restrict livelihood.

Courts also rely on equitable doctrines such as breach of confidence, which require individuals to honour trust when confidential information is provided to them. Indian courts often draw guidance from the English case of Saltman Engineering Co. v. Campbell Engineering Co., where the principle was laid down that confidential information entrusted to a party should not be misused. This reasoning has been integrated into Indian jurisprudence and applied to trade secrets involving employees, business partners, consultants, and collaborators.

Zee Telefilms Ltd. v. Sundial Communications Pvt. Ltd.

One of the most important Indian cases on trade secrets is Zee Telefilms Ltd. v. Sundial Communications Pvt. Ltd., where the Bombay High Court examined whether ideas and concepts could qualify as confidential information. In this case, the plaintiffs alleged that the defendants had disclosed their confidential television show concept to a third party. The plaintiffs argued that the concept was submitted to the defendants in confidence and that the defendants wrongfully used it to develop a television serial.

The Court held that ideas, when shared in confidence, are capable of protection under the doctrine of breach of confidence. The Court recognised that even creative concepts can constitute confidential information if they are original and shared under circumstances that require confidentiality. This judgment expanded the scope of what can be protected as a trade secret in India. It affirmed that confidential information is not limited to technical formulas or business data but can include intellectual concepts that form the basis of commercial value. The case set an important precedent for the entertainment and media industry, where ideas are vulnerable to misuse.

American Express Bank Ltd. v. Priya Puri

The Delhi High Court’s judgment in American Express Bank Ltd. v. Priya Puri is one of the most frequently cited decisions on trade secrets. In this case, the plaintiff bank sought to restrain a former employee from using the bank’s customer list and confidential information after her resignation. The bank argued that customer lists, internal records, business strategies, and client information constituted trade secrets.

The Court held that customer lists indeed qualify as confidential information because they provide an organisation with a competitive advantage. The Court recognised that employees owe a duty of confidentiality to their employers even after their employment ends. The Court emphasised that former employees cannot take advantage of information acquired in confidence during employment. Although Section 27 of the Contract Act restricts non-compete clauses, the Court clarified that confidentiality clauses do not amount to restraint of trade and are therefore enforceable.

This case is significant because it laid down the principle that customer databases and business records are protectable trade secrets. It also established that employers can seek injunctive relief to prevent misuse of confidential information.

Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber

The Delhi High Court, in Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber, examined whether customer lists maintained by a mail order business constituted confidential information. The defendant, a former employee of the plaintiff company, allegedly took away the customer lists and used them for his competing business.

The Court held that customer lists compiled by a business through sustained efforts constitute trade secrets. The Court granted an injunction restraining the defendant from using the lists. This judgment reinforced the principle that confidential databases created through labour and investment deserve protection. It also strengthened employers’ rights against data theft by employees.

Bombay Dyeing & Manufacturing Co. Ltd. v. Meher Karan Singh

In Bombay Dyeing & Manufacturing Co. Ltd. v. Meher Karan Singh, the employer sought to restrain a former employee from divulging confidential manufacturing processes and internal information. The Court recognised that employees entrusted with sensitive information owe a duty not to misuse it. The Court observed that even after the employment contract ends, an employee remains bound by confidentiality obligations if the information is genuinely confidential.

The Court granted injunctive relief, emphasising that trade secrets are valuable commercial assets and misuse can cause irreparable harm. This case strengthened the enforceability of NDAs and confidentiality clauses in employment agreements.

VFS Global Services Pvt. Ltd. v. Sai Reddy B

In this case, the Bombay High Court addressed the misuse of confidential data by an employee of VFS Global Services. The employee was alleged to have retained and used confidential information obtained during employment. The Court reaffirmed the enforceability of confidentiality obligations and emphasised the need for businesses to protect sensitive personal and business data.

The judgment highlighted that the unauthorised retention of confidential information itself constitutes breach of trust, even if the information is not exploited commercially. This case demonstrates that courts treat the preservation of confidentiality very seriously.

Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam

The Delhi High Court in Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam dealt with the misuse of confidential research data relating to hybrid cotton seeds. The plaintiffs alleged that valuable research results and breeding data were leaked by employees to competitors.

The Court emphasised that trade secrets include specialised research data that has commercial value. It held that employees cannot disclose such information irrespective of claims that the data belonged to the employer. The Court analysed the principles of confidentiality and breach of fiduciary duty, establishing that employees involved in research and development owe heightened confidentiality duties.

This judgment is important for the biotechnology and agricultural sectors where confidential research data forms the backbone of competitive advantage.

Diljeet Titus v. Alfred A. Adebare

In this case, an advocate claimed that his former employees had retained confidential client information and draft documents after resigning from his office. Justice Muralidhar of the Delhi High Court held that confidential information stored in computers, including client names and legal drafts, constitutes protectable trade secrets.

The Court granted interim injunctions preventing the former employees from using the information. The judgment highlighted that trade secrets can include digital information and intellectual labour and are not limited to industrial or technical data. It further confirmed that breach of confidentiality is actionable even when the parties are involved in professional services such as legal practice.

Hi-Tech Systems v. Suprabhat Ray

In this case, the Bombay High Court dealt with allegations that former employees of a technology company had used confidential technical information and software code to set up a competing business. The Court recognised that software source code and technical diagrams can constitute trade secrets and granted injunctions restraining the defendants from using the information.

The judgment underscored the importance of protecting technical information in industries such as software development, engineering, and electronics, where proprietary know-how forms a major part of a company’s intellectual property.

John Richard Brady and Ors. v. Chemical Process Equipments Pvt. Ltd.

This case involved the misuse of engineering drawings and manufacturing processes. The Delhi High Court held that engineering designs shared under confidentiality were trade secrets and that their unauthorised use amounted to breach of confidence. The case reinforced the principle that proprietary technical data, even when communicated orally or through drawings, is protected under Indian law.

Navigating Section 27 of the Contract Act

One of the most debated issues regarding trade secrets in India is the interplay between confidentiality clauses and Section 27 of the Contract Act. Section 27 voids agreements in restraint of trade. However, courts have consistently held that confidentiality agreements are valid because they do not restrain trade but merely protect proprietary information. Non-compete clauses, when applied after termination of employment, are generally void. However, confidentiality obligations are enforceable even after the contract ends.

In Niranjan Shankar Golikari v. The Century Spinning and Manufacturing Co. Ltd., the Supreme Court held that negative covenants operative during the employment period are valid. Although the case did not directly involve trade secrets, it clarified the principle that confidentiality obligations during employment are enforceable and do not violate Section 27.

Principles Emerging from Indian Case Laws

Indian courts have developed several guiding principles for trade secret protection. Courts recognise that trade secrets include a wide variety of confidential information, from customer lists to research data and software code. They also hold that confidentiality obligations are enforceable through injunctions, even after termination of employment, if the information genuinely qualifies as a trade secret. Courts protect information shared under fiduciary duty or trust, and do not permit misuse or unauthorised disclosure. They further clarify that independent discovery or reverse engineering is not prohibited, which aligns with global trade secret principles.

Conclusion

The development of trade secret protection in India is predominantly judge-made. Despite the absence of specific legislation, Indian courts have consistently protected confidential information by applying principles of equity, breach of confidence, contract law, and fiduciary duty. Landmark judgments such as those in the Zee Telefilms, American Express Bank, Burlington Home Shopping, Bombay Dyeing, and Emergent Genetics cases have collectively established a strong foundation for trade secret jurisprudence in India.

These cases demonstrate that courts are willing to protect trade secrets in a wide range of industries, including media, banking, biotechnology, engineering, legal services, and software development. They highlight the judiciary’s recognition that trade secrets are essential for business competitiveness and innovation. As India continues to emerge as a global technology hub, the importance of trade secret protection will only grow. The judicial principles established through these landmark cases will continue to guide businesses, policymakers, and courts in preserving, enforcing, and understanding the value of confidential commercial information.