INDIA Law and Practice Contributed by: Pravin Anand, Achuthan Sreekumar and Rohil Bansal, Anand and Anand
2. Misappropriation of Trade Secrets
Modicare Limited v Gautam Bali CS (Comm) 763/2016)). 1.14 Criminal Liability There is no specific offence of trade secret mis - appropriation under Indian law. The offences of criminal breach of trust, theft or cheating may apply, as per the facts of a particular case. See the detailed analysis in 9.1 Prosecution Pro- cess, Penalties and Defences . The owner of a trade secret may simultaneously initiate civil and criminal proceedings against misuse of their trade secrets. A civil action can lead to damages (refer to 7.2 Measures of Damages ) and injunctive reliefs (refer to 7.3 Permanent Injunction and 7.5 Costs ). 1.15 Extraterritoriality A civil dispute concerning a trade secret claim can be brought before any civil court in India where the defendant resides, carries on busi - ness or personally works for gain, or where the cause of action wholly or partly arose. If the person who indulged in misappropriation that occurred in another country is located in India, or if a part of the cause of action arose in India, the concerned Indian civil court will have jurisdiction to entertain a claim for injunctive relief, damages, costs, etc. Furthermore, if a trade secret misappropriation is carried out outside India by a person located in India or through a computer system located in India, a criminal action can also be simultane - ously filed against the wrongdoer by the claim - ant in India. See also 9.1 Prosecution Process, Penalties and Defences .
2.1 The Definition of Misappropriation The courts in India have passed a catena of judgments identifying the essential elements to be established by the rights-holder when prov - ing trade secret misappropriation. The word “misappropriation” finds mention in Section 314 of the Bhartatiya Nyaya Sanhita, 2023, which states that a person who dishon - estly misappropriates or converts the movable property of another for their own use shall be punished with imprisonment of a term that may extend to two years, and a fine. In Beyond Dreams v Zee Entertainment (2016) 5 Bom CR 266, the Bombay High Court held that, in order to establish trade secret misap - propriation, the owner of the rights must prove the following: • the information was a secret, and was not known generally or was not readily accessible to persons who deal with such information; • the individual or owner of such information took reasonable steps to ensure and maintain its secrecy, and the information was imparted in circumstances importing an obligation of confidence; and • there was unauthorised use of that informa- tion to the detriment of the party communi - cating it, or there was a threat to use it. Section 104 of the Bharatiya Sakshya Adhiniy - am, 2023 states that the onus of proving a claim is on the person who makes it. Hence, the bur - den of proving trade secret misappropriation is on the person alleging it.
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