There is no statute that specifically governs trade secrets in India. That said, they are protected through principles of equity/common law action under Indian Contract Act, 1872 (ICA) for breach of confidence, which is in effect a breach of contract. Additionally, India is also a signatory of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which allows members the flexibility to frame laws that prevent unauthorised disclosure and use of certain information.

Practically, trade secrets are protected in India through terms and conditions of a contract containing confidentiality obligations or by making negative covenants against a party for use or misuse of any information received under the terms of that agreement which casts the duty on the receiving party to maintain secrecy of such information. Any breach of terms can give rise to a cause of action for breach of contract.

– WTO's TRIPS Agreement, as of January 1, 1995.
– Paris Convention for the Protection of Industrial Property, Stockholm Act, as of December 7, 1998.

Definition: trade secret has not been defined in any Indian statute. Nevertheless, in few instances, Indian courts have referred to definition of trade secrets given under Black's Law Dictionary which defines trade secret as - a formula, process, device or other business information that is kept confidential to maintain an advantage over competitors. The information includes a formula, pattern, compilation, programme, device, method, technique or process: (a) that derives independent economic value, actual or potential, from not being generally known or readily ascertainable by others who can obtain economic value from its disclosure or use; and (b) that is the subject of reasonable efforts, under the circumstances, to maintain its secrecy.

Criteria for enforcement: though there is no set criteria for identifying a trade secret, courts in India broadly have observed the following aspects to identify trade secrets: (a) the extent to which the information is known outside the business; (b) the extent to which it is known to those inside the business (employees of the business); (c) the precautions taken by the holder of the trade secret to guard the secrecy of the information.

Assignment - licensing: trade secrets are proprietary rights and can be assigned or licensed to other persons. The holder of a trade secret has the right to authorize a third party to access and use the trade secret information. However, due to the secret nature of information, it is not always easy for others to determine whether the information concerned meets the conditions for trade secret protection. Therefore, compared with a patent, it is more difficult to transfer and license confidential information and to resolve disputes which may arise. Since a potential licensee needs to access the trade secret information in order to assess its value or utility, it is vital that a non-disclosure or confidentiality agreement is executed between the potential licensor and licensee. Further, in order to maintain secrecy of the information, a trade secret licensor should require a licensee to take reasonable steps to keep that information secret.

Remedies for misappropriation: an injunction granted by courts can restrain the wrongdoer from disclosing trade secrets as well as damages can be sought by the trade secret owner. Other civil actions which courts can grant to the trade secret owner in case of trade secret leakage is return of trade secrets or materials containing trade secrets. One can also seek damages and rendition of accounts as a remedy in trade secret misappropriation cases. Damages must be quantified and proved during trial before being awarded by the court. While seeking a criminal remedy one should remember that there is no specific offence of trade secret misappropriation. However, offences such as criminal breach of trust, theft or cheating may be applicable, depending upon facts of the case.

Comments: the ideal way to protect one's trade secret is to enter into water tight contracts with employees and third parties, ensure secrecy of trade secret is maintained and formulation, circulation and implementation of trade secret/intellectual property policies within the organisation with regular training/awareness workshops conducted by experts.