Trade Secrets And Breach Of Confidentiality

The Indian legal system is dual by nature, in that it is primarily based on civil laws but permits the application of common law in certain disciplines which have been consciously kept out of the statutory regime. As India does not have a dedicated statute for protection of trade secrets, the entire trade secrets law in India is “judge-made” and is based on the tort of breach of confidentiality. This tortious basis has lent this particular branch of law a certain flexibility and adaptability to the context of the times.

Over the years, trade secrets “law” has borrowed elements from the Indian Contract Act, 1872 and Specific Relief Act, 1963 along with the Copyright Act, 1957, The Designs Act, 2000, The Information Technology Act, 2000, Indian Penal Code, 1860, The Competition Act, 2002 and The Code of Civil Procedure, 1908.

In the absence of a legislation, various Courts have defined the parameters of what amounts to trade secret or confidential information and the circumstances of a breach. Factors to determine the demarcation of private and public information have been laid down by the courts from time to time. For instance, internal corporate communication was held to be private, as the public, or even shareholders, may not be invited to a director’s meeting, as well as internal processes and trade secrets, marketing strategy which are in the nascent stages, pricing policies, and so on, since if such information was prematurely made public, it could result in irreversible and unknown commercial consequences.

As the context invariably determines the outcome, the trade secrets decisions from India can be broadly classified into the following categories:

• Matters involving an injunction sought against the future employment of ex-employees in anticipation of a disclosure of trade secrets;
• Matters involving injunctions and/or damages sought against ex-employees who are found to have actively taken company confidential information or have gained knowledge of the trade secrets of the company by virtue of employment at the time of termination of employment/resignation;
• Matters involving injunctions and/or damages sought against commercial competitors who are found to be misusing company confidential information obtained through unauthorised sources;
• Matters involving injunctions and/or damages sought against licensees and partners with whom a commercial relationship has soured and the boundaries of what constitutes whose proprietary or confidential information/trade secret is in dispute.

Our firm leverages its deep understanding of Trade Secrets law to help our clients retain their competitive advantage by effectively protecting their confidential information and defend it against breaches. Our Trade Secrets lawyers help clients draft non-disclosure agreements and contracts, investigate suspected breaches, and pursue legal action against those who have violated confidentiality agreements.

Members of our firm have helmed a number of pioneering cases on the subject of breach of confidentiality and trade secrets. Our Managing Partner is the author of the India section of the only authoritative commentary on Trade Secrets Law and is widely regarded as an expert on the subject.