INDIA Law and Practice Contributed by: Pravin Anand and Rohil Bansal, Anand and Anand
2.2 Employee Relationships Trade secrets law in India does not differentiate between an employee and a third party. The essence of the law vests in the obligation to maintain secrecy in such confidential information as is not available in the public domain, and which ought to not be used without a licence from the rights-holder. For an employee, the terms of employment may include a non-disclosure covenant, prohibiting them from disclosing confidential information they were privy to during the course of employment. Such a contractual obligation may not be present between the rights-owner and an independent third party. However, even then, such a third party shall be prohibited by courts in India from misappropriating the trade secret. In Zee Telefilms v Sundial Communications (2003) 5 Bom CR 404, the Bombay High Court held that the obligation of confidence does not apply only to the original recipient but also to any other person who receives such information with the knowledge of obli - gation of confidence. The courts must see that the information sought to be protected was not available in the public domain and was communicated to the employee or the third party with a clear obligation to maintain secrecy, which they violated. Therefore, employees would know certain facts and information without any special effort that cannot be termed as trade secrets, and a court may not enter - tain a claim to injunct the employee from using said information (see the Star India case). 2.3 Joint Ventures No codified law recognises the existence of any obli - gations between joint venturers with respect to trade secrets. The parties can determine such rights and obligations concerning the exchange of trade secrets. Such agreements are governed by the Indian Contract Act. Irrespective of the relationship between parties with respect to sharing or use of confidential information, in
In Beyond Dreams v Zee Entertainment (2016) 5 Bom CR 266, the Bombay High Court held that, in order to establish trade secret misappropriation, the owner of the rights must prove the following: • that the information was a secret, and was not known generally or was not readily accessible to persons who deal with such information; • that the individual or owner of such information took reasonable steps to ensure and maintain its secrecy, and the information was imparted in cir - cumstances importing an obligation of confidence; and • that there was unauthorised use of that information to the detriment of the party communicating it, or there was a threat to use it. Section 104 of Bharatiya Sakshya Adhiniyam, 2023 states that the onus of proving a claim is on the per - son who makes it. Hence, the burden of proving trade secret misappropriation is on the person alleging it. It is not mandatory for an owner of a trade secret to prove that their confidential information has been mis - used by the defendant. The very fact that the defend - ant misappropriated the claimant’s trade secret dem - onstrates that the misappropriation was not just to steal the trade secret but to also acquire some unlaw - ful gain from it, which gives rise to credible apprehen - sion of future misuse by the defendant, entitling the claimant to take legal recourse. In a civil proceeding, the rights-owner of a trade secret is merely required to show that the defendant has without authorisation accessed their trade secrets, as a prohibitory order of injunction by a civil court can be passed against the defendant, even in the absence of malice. The Delhi High Court in the case of HCL Technologies Ltd v Mr Sanjai Rangnathan CS (COMM) No 502 of 2023 held that as a prima facie view an employee of a company has no business to transfer, into his per - sonal account, any data of the company, without the company’s permission. If such a practice is permitted, and issues of confidentiality are thereafter sought to be raised, it could result in seriously prejudicing the functioning of corporate enterprises.
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