INDIA Law and Practice Contributed by: Mohit Goel, Sidhant Goel, Aditya Goel and Mehr Bajaj, Sim and San, Attorneys at Law
Courts may also grant John Doe (Ashok Kumar) orders against unidentified infringers. While there is no stan- dalone criminal offence of trade secret theft, conduct may be prosecuted under the Bharatiya Nyaya San- hita, 2023 and the Information Technology Act, 2000. To safeguard secrecy during proceedings, courts increasingly employ confidentiality clubs, alongside sealed filings, redacted pleadings and in-camera hear- ings, with the Delhi High Court formally recognising confidentiality clubs as a key procedural mechanism. 6. Know-How 6.1 Definition and Legal Basis of Know-How Know-how is not a defined legal term in India but is recognised through commercial practice and tax juris- prudence. It encompasses technical or operational expertise, tacit skills and process knowledge. It is broader than trade secrets, and does not require the same level of confidentiality. Indian law does not treat know-how as a property right in rem; it is best under- stood as a bundle of contractual and equitable rights. 6.2 Protectability Requirements and Scope Know-how may be protected to the extent it qualifies as a trade secret or confidential information. Where know-how is sufficiently confidential and commercial- ly valuable, equitable obligations of confidence and contractual protections apply. Know-how that does not meet the threshold for trade secret protection – such as operational expertise widely shared within an industry – may not be protectable at all, and must be managed through contractual restrictions and limited disclosure. 6.3 Ownership, Creation and Employee Know-How Ownership of know-how is governed primarily by contract in India. Under general employment law principles, know-how developed by an employee in the course of employment and using the employ- er’s resources is likely to vest in the employer in the absence of an agreement to the contrary. However, an employee’s general skill and professional expertise developed during employment belong to the employ- ee and cannot be restrained post-employment.
Independent contractors retain the know-how they bring to an engagement unless such know-how is expressly assigned. Employment and service agree- ments should include clear provisions addressing: • which information constitutes the employer’s confi- dential know-how; • the employee’s obligation to maintain confidential- ity during and after employment; • co-operation obligations in documenting and transferring know-how; and • restrictions on post-employment disclosure. 6.4 Protection Through Contract and Confidentiality In India, contractual protection is the primary mecha- nism for safeguarding know-how. Businesses com- monly use non-disclosure agreements (NDAs), confidentiality and non-use clauses in commercial agreements, technology transfer and licensing agree- ments, and employment contracts containing post- termination confidentiality and non-solicitation obli- gations. M&A transactions frequently employ technical NDAs and clean-team protocols to protect sensitive infor- mation during due diligence. Agreements also typi- cally include return-or-destroy obligations, flow-down provisions binding employees and subcontractors, and carefully drafted definitions of confidential infor- mation. Arbitration clauses with court intervention carve-outs for interim relief are common. Where appropriate, liq- uidated damages and injunction provisions strengthen enforcement, although damages must satisfy the rea- sonableness requirements under Indian contract law. 6.5 Licensing and Assignment Know-how may be licensed or assigned indepen- dently of patents or trade secrets, although it is often bundled with patent licences in technology transfer arrangements. Standalone licences are common in the franchising, software and industrial sectors, and typically address scope, confidentiality, exclusivity, royalties, improvements and post-termination obliga- tions.
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