In 2017, the global tech world was shaken when Waymo (Google’s self driving car unit) sued Uber for allegedly stealing confidential designs and source code for its autonomous vehicle technology. The case settled for a staggering $245 million, reminding the world that in the digital age, the most valuable assets of a company are often not patents or trademarks, but trade secrets, often serving as the secret sauce of innovation.
However in India, when we think of intellectual property, the familiar names that come to our mind include patents, copyrights, trademarks, designs and even geographical indications to some extent. These are codified, statutory and enforceable. Yet, there exists another pillar of intellectual property that is still waiting for its day in India’s legal system, yes, the trade secrets. Now imagine a similar case as that of Uber, like above, in India. Without a dedicated trade secrets law, enforcement would be patchy at best, leaving innovators vulnerable and investors wary.
What is a Trade Secret?
Trade secrets include formulas, algorithms, source code, manufacturing processes, business strategies and datasets that derive their value from being confidential. In this digital world and era, where companies are built around algorithms and data more than physical goods, the absence of a trade secrets law leaves a glaring gap in India’s innovation ecosystem.
Could India do better? Can we protect our economy building innovators, entrepreneurs, startups, researchers with meaningful protection of their confidential assets? The answer is a strong “Yes” and one available tool is the enactment of a dedicated Trade Secrets (Protection and Enforcement) Act.
Gaps in India’s IP Regime w.r.t. Trade Secrets
- The current Trade Secrets Framework is in patches
The absence of a dedicated statute means that protection of trade secrets in India is currently dependent on confidentiality clauses, NDAs (Non Disclosure Agreements), equity and common law principles of breach of trust, equity jurisdiction, and scattered provisions under the IT Act, Copyright Act and various criminal laws.
- This Patchy framework creates various problems
Today, Indian companies depend on NDAs and confidentiality clauses in employment contracts, but these only bind the signatories. Once information is disclosed to a third party, or an ex employee walks away, enforcement becomes difficult.
Section 27 of the Indian Contract Act, 1872 makes matters worse. It voids any agreement in restraint of trade, limiting the scope of post employment restrictions. Courts are wary of enforcing overly broad confidentiality or non-compete clauses. In American Express Bank Ltd. v. Priya Puri (2006), the Delhi High Court held that while employers can restrain disclosure of customer databases and confidential lists, they cannot prevent an employee from using her general skills, knowledge and experience gained during employment. This case exposed the limits of contractual protection in India.
At present, misappropriation of trade secrets is prosecuted under general provisions like theft, breach of trust or hacking under the Bharatiya Nyaya Sanhita, 2023 and the IT Act, 2000. None of these directly address trade secret theft. The deterrent value is therefore low.
This patchwork, therefore, leaves gaps. A 2025 report of the USTR (Special 301 Report) once again placed India on the Priority Watch List, noting that “civil remedies are difficult to obtain and criminal penalties are not expressly available for trade secret misappropriation.” In simple terms, stealing a company’s confidential formula or algorithm is not clearly punishable in India.
- Judicial expertise gap
Trade secret disputes often involve source code, AI models, algorithms or datasets. General courts struggle to handle such highly technical evidence. The absence of a specialised forum could delay resolution, thereby undermining the confidence in the system.
In Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam (2011), relating to proprietary seeds and genetic information, the Delhi High Court had to stretch the law of confidentiality and equity to grant protection. The Court observed that Indian law lacks a statutory regime and that judges must “fill the gap” through principles of equity and good faith.
The Need of an Indian Trade Secrets Act acknowledged by various Committees
While the USTR (2025) already criticises India for weak trade secret protection and lack of deterrent penalties, the 22nd Law Commission Report (2024) recommended a sui generis law on trade secrets and economic espionage. In its report, LCI highlighted the urgent need for a sui generis law on trade secrets, observing that without it, India’s ability to negotiate trade and technology transfer agreements remains limited and undermines investor confidence.
Further, the Standing Committee on Commerce – Review of IPR Regime noted that strong IP protection directly correlates with FDI inflows and technology transfer.
It is also important to acknowledge that the Trade Secrets Bill, 2024 was introduced following the 22nd Law Commission’s recommendations on trade secrets and economic espionage, as a legislative initiative seeking to address this very gap in India’s intellectual property framework. While the Bill marked a significant step towards recognising trade secrets as a distinct subject of statutory protection, it has faced concerns relating to definitional clarity, enforcement architecture and its interface with existing contractual and criminal law principles. Questions have also been raised regarding the scope of remedies and the institutional mechanism for adjudication. Consequently, the conversation on trade secrets reform in India remains open and evolving.
Global counterparts
The United States has its Defend Trade Secrets Act, 2016 which provides civil remedies and ex parte seizure. The Economic Espionage Act, 1996 criminalises theft. In the European Union, the Trade Secrets Directive (2016/943) governs the area. China’s (2019 amendment) explicitly includes cyber-intrusion in “improper means” and imposes enhanced penalties for national interest secrets. While Japan & South Korea have law to impose criminal liability and enhanced penalties for strategic sector trade secrets.
India’s absence of such a law is increasingly conspicuous.
Therefore, through this blog, the author introduces the key ideas from her draft Trade Secrets (Protection and Enforcement) Bill, 2025, modelled on international best practices yet tailored to India’s digital and economic realities, addressing the challenges raised in the 2024 Bill. [The draft is ready for consideration by policymakers and the Parliament as a step towards filling India’s most significant gap in the IP regime. Interested readers or policymakers may reach out for the full draft for research or consultation purposes]
What the bill will look like?
For the first time, businesses, startups, and even individual innovators would gainstatutory recognition of trade secretsas a distinct, protectable right. No longer would protection depend entirely on private contracts or vague equitable doctrines, it would flow directly from the law itself.
The Bill envisions both civil and criminal remedies, creating a robust deterrent architecture. It empowers rights holders to seek injunctions, damages, and even urgent ex parte seizure orders, inspired by the U.S. Defend Trade Secrets Act (2016). At the same time, it introduces criminal penalties for willful misappropriation, particularly in cases of hacking, cyber-espionage, or national security concerns. As the Delhi High Court aptly observed in Bombay Dyeing and Manufacturing Co. Ltd. v. Mehar Karan Singh (2014), “in the absence of a dedicated statute, courts can only rely on equitable principles.” This law would finally give judges a legislative backbone to issue strong, deterrent orders.
One of the Bill’s most forward thinking innovations is the creation of a Trade Secrets Protection Cell, a quasi-judicial body under the Ministry of Electronics & Information Technology. This Cell would bring together experts in law, cyber forensics, and digital governance to handle complaints, impose penalties, and coordinate with agencies like CERT-In on cyber-enabled theft. Much like the Data Protection Board under the DPDPA (2023) or the Competition Commission of India, this institution would blend technical expertise with judicial authority, ensuring speed and specialisation in decision making.
What makes the Bill particularly balanced is its sensitivity to employee mobility and public interest. It draws a clear line between what belongs to the employer and what belongs to the employee, protecting genuine trade secrets while preserving an individual’s right to use their general skills and knowledge, following the principle laid down in American Express Bank Ltd. v. Priya Puri (2006). It also explicitly recognises lawful reverse engineeringandwhistleblowing as legitimate acts, acknowledging that transparency, innovation, and accountability must coexist.
Even when the State steps in say, for regulatory or national security reasons, the Bill ensures due process. Government authorities may use or disclose trade secrets only after giving at least 10 days’ prior notice to the trade secret holder, except in emergencies. This mirrors procedural safeguards found in India’s Right to Information Act, 2005 and the U.S. Freedom of Information Act, guaranteeing fairness while respecting sovereignty.
In short, this proposed law doesn’t merely fill a legal vacuum it builds a modern, forward looking ecosystemfor India’s digital economy. The benefits would cut across sectors.
Who all will benefit?
- Technology firms and startups would gain enforceable protection for source code, proprietary algorithms, and AI models.
- Pharma and biotech companies could safeguard processes, formulations, and clinical trial data.
- Manufacturing and FMCG sectors would be able to finally protect their recipes, pricing models, and supply chain systems effectively.
- Academia and research institutions could collaborate with industry partners without fear of data theft.
- Employees and researchers would enjoy clarity where their professional skills remain free, but misappropriating confidential data will have consequences.
- Government and society could benefit from whistleblower protection and structured mechanisms for national security disclosures.
In essence, the Bill proposes a 21st century legal infrastructure for a 21st century economy, one that values and lawfully protects confidentiality but never at the cost of transparency, accountability, or innovation.
As India positions itself as a global technology and innovation hub, a dedicated trade secrets law is not a luxury, it is a necessity for sustaining investor confidence, safeguarding innovation and fostering ethical competition.
Authored by: Ms. Radhapriya Goel, Gujarat National Law University, Gandhinagar
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