India has no trade secrets legislation. Enforcement runs entirely through contract and the equitable duty of confidence — which makes the drafting of the clause the whole ballgame. A travel-agency dispute before the Delhi High Court shows exactly where such clauses succeed and where they fail.
It is not the answer that enlightens, but the question.
That is apt for the Indian IP scene, where individuals and companies bring courts genuinely interesting questions, and the courts have been both liberal and cautious in interpreting the provisions. On confidentiality clauses, non-disclosure agreements and trade secrets, there have long been many questions and few answers. Two cases — one in the Calcutta High Court, one in the Delhi High Court — shed some light.
The Calcutta High Court had granted an injunction against use of confidential information in the form of marketing information and customer details. The Delhi High Court then heard a dispute over sharing and disclosure of trade secrets, confidential data and intellectual property rights. Though it did not grant an injunction, the judgment recognised the importance of the clause and directed the other party to adhere to the agreement’s terms.
The facts
A company in the travel business had its shareholding split between the plaintiff (40%) and the defendant (60%). The defendant appointed two managers and arranged with a certain person to source business from Italy. The plaintiff later discovered that those managers and the Italy contact had started their own business, including a travel agency, and they exited the company.
In 2012, the plaintiff agreed to buy out the defendant’s shareholding, and they signed an agreement. Under it, the defendant agreed not to share or disclose the plaintiff’s trade secrets, confidential data, IPR or works, and to notify the public and existing clients of his disassociation.
The plaintiff subsequently learned that the defendant, together with the person who had exited, continued to pursue business as travel agents.
The clause
Clause 4 required that the defendant:
- not share or disclose trade secrets, confidential data, IPR or works of the plaintiff;
- not run a business within the definition of Inbound Tours, or any business construed as similar to the plaintiff’s, for three years; and
- not initiate, maintain or engage in commercial dealings with existing clients for three years.
The defendant’s answer — and why it worked
The defendant’s position was revealing: he had no objection to complying with the clause, but since none of the terms were defined, it was bound to lead to needless litigation.
The plaintiff then set out what it said the trade secrets and confidential information comprised:
- contact information of clients, partners, hotels, restaurants, shopping complexes, transportation providers and guides; and
- commercial terms offered to clients, partners, hotels, restaurants, shopping complexes, transportation providers, routes and guides.
The defendant countered that even this could not restrain his business, since those facts and figures are available to everyone in the travel trade.
What the court held
The court partially agreed with the defendant. The terms were not clearly defined in the agreement, and not all the information the plaintiff identified could be the subject of an injunction. Since much of it would be in the public domain and known to travel agents generally, the defendants could not be restrained from using it.
It nonetheless directed the defendants to abide by the agreement for three years — which was a curious direction, given that the three-year period had expired on 5 February 2015.
The lessons
The case reaffirms that courts will enforce trade secret and confidentiality agreements where the agreement says so in unequivocal terms. Two practical points follow:
- Define the scope of trade secrets and confidential information. This is the basis of the agreement, and an undefined clause invites exactly the argument the defendant made.
- Understand what is genuinely not public. Ensure the agreement covers only information that is not publicly available — a clause reaching into the public domain will be read down, and may weaken the parts that were enforceable.
Where the law stands now. India still has no dedicated trade secrets statute. Protection continues to rest on contract, the equitable duty of confidence, and — where employees are involved — the limits of Section 27 of the Contract Act, 1872, which renders agreements in restraint of trade void, so that post-employment non-compete clauses are generally unenforceable while confidentiality obligations survive. The 22nd Law Commission recommended a dedicated Protection of Trade Secrets Bill in 2024, but no such statute has been enacted.
Until one is, the drafting is the protection. A well-defined confidentiality clause is not a formality — it is the entire legal basis on which the information is protected.
The takeaways
- No trade secrets statute in India — enforcement rests on contract and equity.
- Define what is confidential — undefined terms get read down.
- Public domain information cannot be protected, however the clause is worded.
- Non-competes are largely unenforceable under Section 27; confidentiality obligations are not.
Frequently asked questions
Is there a trade secrets law in India? No — India has no dedicated statute. Trade secrets are protected through contract and the equitable duty of confidence, though a Protection of Trade Secrets Bill was recommended in 2024.
Will courts enforce an NDA in India? Yes, where the agreement states its obligations in unequivocal terms and identifies what is confidential.
Can publicly available information be protected as a trade secret? No — the court held that information in the public domain, known generally within the trade, cannot be the subject of an injunction.
Are post-employment non-compete clauses enforceable? Generally not — Section 27 of the Contract Act renders agreements in restraint of trade void, though confidentiality obligations remain enforceable.
Useful official resources
- The Indian Contract Act, 1872
- Law Commission of India