The Protection of Trade Secrets Bill 2024 is a draft statute appended to the 22nd Law Commission’s 289th Report dated 5 March 2024. It has not been enacted as of June 2026. If enacted, it would give India a dedicated civil framework for trade secret misappropriation while supplementing, not replacing, existing contract law, breach-of-confidence principles, and general criminal remedies.
What you need to know
- The Bill is a Law Commission draft, not an enacted law. Parliament must pass it before it has any legal force.
- Its remedies are civil only: injunctions, damages, accounts of profits (requiring the wrongdoer to hand over profits made from misuse), delivery up (handing over or destroying materials containing the secret), and recall or removal of infringing goods. Criminal liability continues to rest on general provisions of the Bharatiya Nyaya Sanhita and the IT Act.
- The Bill defines trade secrets using four conditions, one more than the TRIPS standard, adding that disclosure must be likely to cause damage to the holder.
- Employee general skills and experience from normal professional practice are explicitly excluded, as is information whose disclosure exposes a violation of law.
- Reverse engineering and independent creation remain lawful under the Bill.
Why India Needs This Bill
India has no dedicated trade secrets statute. Businesses currently assemble protection from several overlapping sources: non-disclosure agreements under the Indian Contract Act 1872, the breach-of-confidence doctrine from common law, and general criminal provisions. The full picture of that existing framework covers what each source does and where it falls short.
The gaps are real. There is no statutory definition of a trade secret, no dedicated adjudicatory route, no codified list of what counts as misappropriation, and no statutory basis for confidentiality orders during litigation. Courts have filled some of these gaps through case law, but outcomes have been inconsistent, particularly in employer-employee disputes where the boundary between a protectable secret and an employee’s general skill has never been clearly drawn by statute.
The Bill attempts to close all of these gaps in a single instrument. It would not, however, displace the common law breach-of-confidence action or other existing remedies. Its Section 13 expressly preserves all existing rights and jurisdictions to restrain breach of trust or confidence.
Current Position versus What the Bill Proposes
| Issue | Current position | Proposed Bill position |
| Definition of trade secret | No statutory definition; courts apply case-by-case principles | Four-part statutory definition aligned with TRIPS |
| Reverse engineering | Generally lawful unless it breaches a specific contractual obligation | Expressly and unconditionally lawful if product is publicly available or lawfully obtained |
| Litigation secrecy | Courts may use confidentiality clubs at their discretion | Statutory duty on courts to preserve confidentiality in proceedings |
| Civil remedies | Contract law, equity, and general civil remedies | Dedicated civil remedies including recall and removal of infringing goods |
| Criminal liability | General BNS and IT Act provisions where facts support it | Still general statutes only; no dedicated criminal offence in the Bill |
| Adjudicatory forum | Civil courts, Consumer Courts, or High Courts depending on facts | Commercial Court or Commercial Division of a High Court under Commercial Courts Act 2015 |
How the Bill Defines a Trade Secret
The Bill’s definition is the most consequential provision. Information qualifies as a trade secret only if it satisfies all four of the following:
- It is not generally known among, or readily accessible to, persons in circles that normally deal with information of that kind.
- It has commercial value because it is secret.
- The holder has taken reasonable steps to keep it secret.
- Its disclosure is likely to cause damage to the holder.
The first three conditions mirror Article 39(2) of the TRIPS Agreement, which governs undisclosed information. The fourth condition is the Bill’s addition: it requires that disclosure would actually harm the holder, not merely that the information is commercially valuable in the abstract.
The Bill also draws an important boundary on the employee side. An explanation to the definition states that skills and experience acquired by an employee through normal professional practice are not trade secrets. A second exclusion covers information whose disclosure would expose a violation of law. Together, these exclusions address two recurring patterns: employers using trade secret claims to prevent employees from moving to competitors, and organisations using confidentiality obligations to suppress disclosure of wrongdoing.
What the Bill Permits: Lawful Ways to Acquire a Trade Secret
The Bill explicitly lists the methods by which a trade secret may be acquired without any risk of liability. These include:
- Independent discovery or creation
- Observation, study, disassembly, reverse engineering, or testing of a product or object that is publicly available or lawfully in the person’s possession
- Any other method consistent with honest commercial practices
The practical effect is that a competitor who develops the same formula independently, or who acquires information by studying or testing a lawfully obtained product, commits no wrong under the Bill.
The Bill’s structure reflects the Law Commission’s position that trade-secret protection is not patent-like monopoly protection. Because independent discovery and reverse engineering remain lawful, a trade secret gives its holder no exclusive right against a competitor who reaches the same information by those means. This is not a limitation the Bill creates; it is a characteristic of trade secret protection in all jurisdictions, now expressed through the Bill’s exhaustive list of lawful acquisition methods.
Codifying these permissions matters in practice. It removes the ambiguity that has allowed some employers to threaten litigation against employees and competitors based on the mere possibility that confidential information was used, even when the route of acquisition was entirely lawful.
What Counts as Misappropriation
The Bill defines misappropriation as acquiring, using, or disclosing a trade secret without the holder’s consent by methods contrary to honest commercial practices. The specified unlawful methods include:
- Acquiring a trade secret without consent through unauthorised access, appropriation, or copying, or through conduct contrary to honest commercial practices
- Using or disclosing a trade secret obtained through breach of a confidentiality agreement, breach of contract, or any other legal duty
- Acquiring, using, or disclosing a trade secret where the person knew, or ought to have known, that it was originally obtained through any of the above means
The third category is significant for recipients: a business that receives information from a departing employee, knowing or having reasonable grounds to suspect that the employee took it without authority, is itself liable for misappropriation even if the business did not actively encourage the taking.
Commercial misappropriation fact patterns such as hacking, corporate spying, bribery, and inducement to breach a confidentiality obligation may be covered where the statutory elements of the definition are met. The Bill does not, however, create a separate economic espionage offence. The Law Commission treated economic espionage, particularly where a foreign state is involved, as a distinct issue requiring separate legislative treatment and reserved it for separate recommendation.
Remedies Under the Bill
The Bill’s remedies are strictly civil. A court hearing a misappropriation claim may grant:
- Interim injunctions, including ex parte injunctions where the matter is urgent
- Permanent injunctions preventing continued use or disclosure
- Damages to compensate for loss caused by the misappropriation
- Accounts of profits, requiring the wrongdoer to hand over profits made from the misappropriated information
- Recall or removal of goods or products that incorporate or were produced using the misappropriated secret
- Delivery up or destruction of materials containing the trade secret
- A remedy against groundless threats (legal threats made without proper basis), where a holder uses the threat of litigation to intimidate employees or competitors
All misappropriation suits are to be filed in a Commercial Court or the Commercial Division of a High Court having jurisdiction, under the Commercial Courts Act 2015. The Bill does not prescribe a special limitation period. In the absence of a special period, Article 113 of the Limitation Act 1963 would likely apply, giving three years from when the right to sue accrues.
The Bill does not create criminal remedies of its own. Criminal liability continues to arise, where the facts support it, under: the Bharatiya Nyaya Sanhita 2023 (criminal breach of trust under Section 316, cheating under Section 318) and the IT Act 2000 (Sections 43 and 66 for unauthorised access and computer-related offences done dishonestly or fraudulently). The Bill’s Section 13 makes clear that it supplements, and does not replace, existing legal remedies.
Protections Built Into the Bill
The Bill contains several provisions designed to protect both parties in a trade secret dispute, not only the holder.
Confidentiality during litigation. Courts are required to take steps to preserve the confidentiality of trade secrets during proceedings. Confidentiality clubs and in-camera proceedings have been used by Indian courts before, but without a statutory mandate. The Bill makes this mandatory.
Statutory exceptions, including for whistleblowers. A person who discloses a trade secret to expose illegal activity or professional misconduct, or in good faith to protect a public interest, falls within a statutory exception and is not treated as committing misappropriation.
Compulsory licensing. During a national emergency, extreme urgency involving substantial public interest (including a public health emergency), or a national security situation, the central government may issue a compulsory licence authorising use of a trade secret by a third party or the government itself, subject to payment of a licence fee. The licence fee is to reflect the nature and value of the trade secret and the expenditure incurred in developing and maintaining it. The detailed method, conditions, form, and termination are to be prescribed by rules under Section 12. This provision is loosely analogous to government-use concepts under Section 100 of the Patents Act 1970, though the trigger conditions and mechanics differ.
Groundless threats remedy. A person who receives a groundless legal threat from a trade secret holder can apply to court for an injunction against the continuation of that threat and recover damages for any harm caused. This provision is targeted at the pattern where employers use threats of legal action to prevent former employees from joining competitors, treating confidential information as if it conferred exclusive property rights.
What the Bill Does Not Do
Three things the Bill does not address are worth noting for any business assessing what it would mean in practice.
No criminal sanctions in the Bill itself. The Bill relies on existing general criminal law for deterrence. Specific criminal penalties for trade secret theft are absent from the draft. Whether the BNS and IT Act provisions are sufficient substitutes depends on the facts of each case and whether the elements of those general offences can be established.
No detailed valuation mechanism for compulsory licensing. The Bill authorises government-ordered compulsory licensing in emergencies and directs that a fair licence fee reflecting the trade secret’s value and development costs be paid, but does not specify the detailed formula or adjudicatory mechanism for determining that fee. Section 12 delegates the method, conditions, and procedure to rules to be made by the central government.
No dedicated support for small businesses. The Bill applies uniformly to all businesses. It does not contain any concessions for MSMEs or startups in terms of simplified filing procedures, lower court fees, or government support for enforcement.
What Businesses Should Watch For
The Bill has not been tabled in Parliament as of June 2026. Its eventual passage, and the form in which it is passed, will determine how effective it is in practice. Several points are worth tracking.
The criminal remedy gap. If Parliament adds a criminal remedy provision before enactment, the deterrence effect of the statute will be substantially different from the current draft. Several international trade secret regimes include criminal penalties for wilful misappropriation.
Compulsory licensing rules. How the central government frames the fee formula and adjudicatory process under Section 12 will matter significantly for technology-intensive businesses and pharmaceutical companies, where a trade secret may represent years of R&D investment.
Section 13 interaction with existing remedies. The Bill preserves the common law breach-of-confidence action. After enactment, a plaintiff will need to decide whether to proceed under the Bill, under common law, or under both, and the strategic implications of that choice will take time to settle in case law.
For advice on how the proposed framework affects your confidential information strategy, see our IP audit and strategy services. For understanding how NDAs should be drafted to survive both the current common law test and the Bill’s likely framework, see our article on non-disclosure agreements.
Frequently Asked Questions
No. The Protection of Trade Secrets Bill 2024 is a draft recommended by the 22nd Law Commission in its 289th Report dated 5 March 2024. It has not been introduced in Parliament or enacted as of June 2026, is not presently in force, and will require a Central Government notification to come into force after Parliament passes it.
No. India has no standalone statute governing trade secrets as at June 2026. Protection relies on NDAs under the Indian Contract Act 1872, the breach-of-confidence doctrine developed by courts, and general provisions of the IT Act and the Bharatiya Nyaya Sanhita. See our article on the existing framework for a full account.
The Protection of Trade Secrets Bill 2024 is a draft statute recommended by the 22nd Law Commission of India in its 289th Report dated 5 March 2024. It proposes India’s first dedicated trade secret law, covering definition, misappropriation, civil remedies, and confidentiality in proceedings. It has not been enacted as at June 2026.
No. The Bill’s own remedies are strictly civil: injunctions, damages, accounts of profits, delivery up, and recall of infringing goods. Criminal liability continues to arise under the Bharatiya Nyaya Sanhita 2023 and the IT Act 2000, which are general statutes not designed specifically for trade secrets.
Under the Bill, information qualifies as a trade secret if it is not generally known in the relevant field, has commercial value because it is secret, has been subject to reasonable protective steps by the holder, and its disclosure is likely to cause damage to the holder. The fourth condition goes beyond the three-part TRIPS Article 39(2) standard.
Yes. The Bill explicitly lists observation, study, disassembly, reverse engineering, and testing of a product that is publicly available or lawfully obtained as permitted acquisition methods. Independent discovery is also lawful. A trade secret provides no protection against a competitor who reaches the same information by these means.
Misappropriation suits under the Bill are to be filed before the Commercial Court or the Commercial Division of a High Court having jurisdiction, under the Commercial Courts Act 2015. The Bill does not prescribe a special limitation period; Article 113 of the Limitation Act 1963 would likely apply, giving three years from when the right to sue accrues.
No. The Bill contains an explicit exclusion: skills and experience acquired by an employee through normal professional practice are not trade secrets. A second exclusion covers information whose disclosure would expose a violation of law. These provisions close the statutory gap that has allowed some employers to treat general professional competence as protectable confidential information.
Disclaimer: This article describes the Protection of Trade Secrets Bill 2024 as recommended by the 22nd Law Commission of India in its 289th Report. The Bill has not been enacted as at June 2026 and its provisions may change before and if it is passed. This article is for general information