INDIA Law and Practice Contributed by: Pravin Anand, Achuthan Sreekumar and Rohil Bansal, Anand and Anand
In Krishan Murugai v Superintendence Co, AIR 1979 Delhi 232, the court held that an injunc - tion can operate after termination of employ - ment only if it is confined to the divulgence of trade secrets. There can be no restriction on the employee from joining a competitor post-termi - nation. However, a negative covenant operating against the employee during the period of ser - vice was held to be legal. 4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise Indian law surrounding trade secrets clearly differentiates between the trade secret of an employer and the general knowledge and skill set that the employee hones during employment. As upheld in the Star India case, employees who have been working for an employer would know certain facts and information without any special effort and which cannot be termed as trade secrets of the employer, and a court may not entertain an employer’s claim to injunct the employee from using said facts and information. In Bombay Dyeing v Mehar Karan, the court relied on the judgments of the US Court of Appeals, Tenth Circuit in Rivendell Forest v Georgia Pacif - ic 31 USPQ 2d1472 and in Kodekay Electronics v Mechanex Corp 486 F 2d 449 (Tenth Circuit 1973), and held that something which is known outside the business or to those inside the busi- ness (ie, the employees), and for the guarding of which no steps have been taken and for the development of which no effort or money has been expended, cannot be a trade secret. Therefore, while an employer cannot restrain an ex-employee from joining a competing busi -
ness or from starting a competing business, it can certainly prohibit the ex-employee from dis - closing information exclusively imparted to the employee by the employer during the course of employment, which is not part of public knowl - edge and which, if divulged by the employee, will lead to adverse consequences for the employer. The doctrine of inevitable disclosure is not recog - nised in India as such. However, if the employee unintentionally discloses a trade secret of their former employer to their current employer, the former employer may be able to bring a claim for damages and injunctive relief against the ex-employee and their current employer. Please refer to 2.1 The Definition of Misappropriation . 4.2 New Employees The practices followed by companies while hir - ing employees from competitors vary. The fol - lowing precautions may be taken to reduce the chances of being subject to a trade secret mis - appropriation claim: • a written undertaking from the employee con - firming that they have not retained any trade secret of their previous employer; • a written declaration from the employee clearly stating that the current employer did not seek any trade secret of the previous employer from the employee; and • a written undertaking whereby the employee indemnifies the current employer from any harm resulting from any act or omission of the employee as regards any confidential infor - mation pertaining to the previous employer. 5. Trade Secret Litigation 5.1 Prerequisites to Filing a Lawsuit The procedure is as follows.
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