RAJIV GANDHI NATIONAL UNIVERSITY OF LAW
PUNJAB
FUNDAMENTALS OF IPR
BLOG: TRADE SECRETS AND EMPLOYEE MOBILITY IN TECH
COMPANIES
Submitted By: Submitted To:
Rishab Goyal Dr. Geetika Walia
Roll Number: 22112 Associate Professor of Law
RGNUL, Patiala
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A. BONAFIDE CERTIFICATE
This certificate is presented to declare that this project based on “Blog : Tarde Secrets and
Employee Mobility in Tech Companies”. is an original piece of work by Rishab Goyal
(22112) who is a bonafide student of the Sixth Semester in Rajiv Gandhi National University
of Law, Patiala.
DR. GEETIKA WALIA, ASSOCIATE PROFESSOR OF LAW.
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B. ACKNOWLEDGEMENT
I would like to take this opportunity to convey my profound gratitude and deep regards to Dr.
Geetika Walia (Associate Professor of Law) for her guidance and valuable feedback and
constant support throughout the duration of this project. Her suggestions were of monumental
help in the completion of my project.
My gratitude also extends to all the members of the RGNUL Teaching staff who provided
consistent love and support which made the fruition of this project possible. I am also grateful
to the members of the IT department and the Library whose aid made it possible to research
and gather resources for the project.
Lastly, I would like to thank my group members and all our batchmates who encouraged me
throughout the completion of this undertaking and did not let me lose any enthusiasm along
the way.
Rishab Goyal
Rajiv Gandhi National University of Law
(22112)
Third Year
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C. TABLE OF CONTENT
A. BONAFIDE CERTIFICATE.............................................................................................2
B. ACKNOWLEDGEMENT.................................................................................................3
C. TABLE OF CONTENT.....................................................................................................4
1. INTRODUCTION..............................................................................................................5
2. UNDERSTANDING TRADE SECRETS IN THE TECH INDUSTRY..........................5
3. EMPLOYEE MOBILITY IN TECH COMPANIES.........................................................7
4. CONFLICT BETWEEN TRADE SECRET PROTECTIONS AND EMPLOYEE
MOBILITY................................................................................................................................7
5. STRENGTHENING TRADE SECRET PROTECTION IN INDIA.................................9
6. CONCLUSION................................................................................................................10
7. BIBLIOGRAPHY............................................................................................................10
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1. INTRODUCTION
In this rapidly evolving and developing technological era, innovation is a key driver of
success. With corporations investing so heavily in the research and development (R&D) in
order to create new proprietary technologies, business strategies, and algorithms which
provide them the competitive edge in the market, protecting them from others becomes vital
for maintaining market dominance. These valuable pieces of confidential business
information are commonly known as Trade Secrets, which do not require any registration but
must be actively protected from unauthorized usage or disclosure.1
However, Employee Mobility – the ability of employees to switch jobs or start their own
ventures - possess a significant threat to the Trade Secret Protection. With technology sector
being accredited with high attrition rates, employees frequently hop between competitors or
launch start-ups based on their experiences. 2 While businesses have great interest in
protecting their proprietary knowledge through Non-Disclosure Agreements (NDAs), Non-
Compete Clauses and Confidentiality Agreements, employees counter that these retractions
hinder their innovation, professional growth and market competition, thus giving rise to a
ethico-legal dilemma: How can companies protect their Trade Secrets without unfairly
restricting employee’s right to work??
This blog will explore the intricate relationship between Trade Secret and Employee Mobility
in the Tech Companies in the Indian landscape, which lacks a dedicated trade secrets law and
relies heavily on common law principles, contracts law and judicial precedents to address
trade secrets disputes, in juxtaposition with other jurisdictions like United States with their
“Defend Trade Secrets Act, 2016” and European Union with their “Trade Secrets Directive
(2016/943)”.
2. UNDERSTANDING TRADE SECRETS IN THE TECH INDUSTRY
Trade Secrets are an essential form of Intellectual Property especially for technological
sector, where proprietary knowledge and innovation drive competitive advantage. These are
1
Robert G Bone, ‘A New Look at Trade Secret Law: Doctrine in Search of Justification’ (1998) 86 Calif L Rev
241
2
Anna Wendel, ‘Employee Mobility Intentions within a Regional Industry: A Study on High-Tech Employees’
Perceived Opportunities and Preferences for Mobility within a Regional Industry’ (2020)
5
confidential business information which unlike patents or copyrights are not required to be
registered and rely heavily on confidentiality for their protection. This protection is indefinite
as long as the information remains confidential, because once publically disclosed, a trade
secret may be lost forever.3 Article 39 of the TRIPS Agreement (Trade Related Aspects of
Intellectual Property Rights) specifies that an information qualifies as a Trade Secret if it:
i. Is not publically known,
ii. Has a commercial value by virtue of its secrecy, and lastly
iii. Is subject to reasonable protective measures
Jurisdictions across the globe have enacted dedicated trade secrets laws. Like the United
States have their ‘Defend Trade Secrets Act, 2016’ which provides federal protection and
allows companies to seek remedies for misappropriation. Similarly the European Union’s
Trade Secrets Directive (2016/943) provides protection across its member states. In stark
contrast, India even after making some promising efforts to legislate the Trade Secret
protection, latest being the “Protection of Trade Secrets Bill, 2024” recommended by the Law
Commission in its 289th report, still lacks a standalone law on trade secrets and have to
primarily rely on common law principle, contracts and judicial decisions for its protection.
Indian courts have recognised trade secrets under breach of confidence, contractual
obligations and equitable relief.4
Under the technological sector, Trade secrets covers a broad range of proprietary information
including software source codes, algorithms, customer data, and business strategies. Despite
lack of legislative material, courts in India plays an important role in protecting such
confidential information. For instance, Bombay High Court in Zee Telefilms Ltd. v. Sundial
Communications5 upheld the confidentiality agreement to protect proprietary business
information, and in other instance the courts had restrained an ex-employee from using the
company’s customer database to compete6, thereby rooting for the legal principle advocating
for the protection of trade secrets.
3
Difference Between Patent, Copyright, Trademark & Trade Secret’https://bytescare.com/blog/difference-
between-patent-copyright-trademark-trade-secret. Assessed 30 March 2025
4
Tata Motors ltd. v. State of West Bengal (2015); Delhi HC Richard Brady and Ors. v. Chemical Process
Equipment Pvt. Ltd. and Anr. (AIR 1987 Delhi 372)
5
Zee Telefilms Ltd. v. Sundial Communications, 2003
6
Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber (1995)
6
3. EMPLOYEE MOBILITY IN TECH COMPANIES
The technology sector is characterized with its high employee turnover, with skilled
professionals frequently switching jobs, joining competitors, or launching their own start-ups.
Even though this mobility encourage industry growth and knowledge sharing, it also comes
with inherent legal and ethical risks about trade secret misappropriation. 7 Companies are seen
to mitigate these risks through various non-compete clauses, non-disclosure agreements
(NDAs), and garden leave policies, but the Indian law places significant limitations on such
restrictions.
The Constitution of India guarantees every citizen’s fundamental right to profession, trade, or
business.8 Additionally the Indian Contract Act, 9 renders non-compete agreements void in
most of the cases, thereby making it hard for companies to prevent former employees from
joining competitors.10 But unlike non-compete agreements, NDAs, which prevent employees
from sharing confidential information with outsiders, are legally enforceable in India
provided they are reasonable in scope and duration.11
Unlike traditional industries, the tech sector thrives on continuous learning and innovation.
Tech industry experiences high employee mobility due to a combination of factors, including
a competitive talent market – where companies instead of investing in their own employees,
find it cheaper to employee an already skilled professional from their competitor, rapid
technological advancements, and pursuit of new challenges and opportunities. While mobility
benefits employees and the industry, it creates a legal tension between trade secret protection
and an individual’s right to pursue career growth.
4. CONFLICT BETWEEN TRADE SECRET PROTECTIONS AND EMPLOYEE MOBILITY
As discussed above, tech industry thrives on talent mobility, and this movement often leads
toward disputes over Trade Secrets. With companies trying to protect proprietary information
and employees badgering their right to work, this creates many legal and ethical challenges,
7
John K Mawdsley and Deepak Somaya, ‘Employee Mobility and Organizational Outcomes: An Integrative
Conceptual Framework and Research Agenda’ (2016) 42(1) Journal of Management 85.
8
Constitution of India, art 19(1)(g).
9
Indian Contract Act 1872, s 27
10
Niranjan Shankar Golokari v. The Century Spinning & Mfg. co. ltd., 1967
11
Zee Telefilms Ltd. v. Sundial Communications (2003) Bombay HC
7
especially in India, where Non-Compete Clauses have limited enforceability and Trade Secret
Law remains largely underdeveloped.
Trade secret breaches aren’t always intentional. When employees switch jobs, they naturally
take their experience and industry knowledge with them. Sometimes, without realizing it,
they apply proprietary processes, customer insights, or technical strategies from their
previous employer. A software engineer, for example, might unknowingly recreate an
algorithm or system design they worked on before, even if they don’t have direct access to
old files.
In spite of this, some employees may intentionally take confidential data, whether to gain an
advantage in their new position or to benefit their new employer, in an effort to gain an
advantage.12 Before leaving, it may be necessary to download source code, transfer client
lists, or email sensitive documents to a personal account. In some cases, organizations even
encourage incoming employees to bring proprietary information with them—a risky move
that could result in serious legal problems.
This issue is further complicated by the fast-paced nature of the technology industry. Many
companies hire talent from their competitors, which is a perfectly normal practice. However,
there is an issue when the primary motivation for hiring is not just expertise, but access to
trade secrets as well.13 For instance if an engineering company that hires someone who has
developed cutting-edge artificial intelligence models or computer programs is likely to face
legal disputes regardless of whether they bring physical files with them.
To avoid situations such as this from occurring, many organizations impose a variety of
restrictive contracts with their employees, including Non-Disclosure Agreements, Non-
Competition Agreements, and Garden Leave Clauses. These agreements require employees to
serve a paid notice period before transferring sensitive information. It should be noted that
there is no dedicated trade secret law, and the extent to which these restrictive measures can
be enforced by companies is limited, so the protection of confidential information takes a
back seat to the rights of employees.
12
Margo EK Reder and Christine Neylon O’Brien, ‘Managing the Risk of Trade Secret Loss Due to Job
Mobility in an Innovation Economy with the Theory of Inevitable Disclosure’ (2011) 12 J High Tech L 373
13
Bradford K Newman, ‘Protecting Trade Secrets: Dealing with the Brave New World of Employee Mobility’
(2007) 17 Bus L Today 25.
8
5. STRENGTHENING TRADE SECRET PROTECTION IN INDIA
Historically, Indian trade secret protection has been characterized by a patchwork of contract
law, judicial precedent, and equitable principles, rather than by a unified legal framework.
Businesses are concerned about this lack of clear statutory protection, particularly as the
economy grows and they seek stronger safeguards for proprietary information while
maintaining the rights of employees.
Indian intellectual property law has traditionally rejected including trade secrets, arguing that
secrecy, not public disclosure, as their distinguishing characteristic. Rather than enacting new
laws to align with the TRIPS Agreement, India believes confidentiality should be protected
under contractual and civil law instead of intellectual property laws. 14 Despite aligning with
the TRIPS Agreement by enacting new laws, India did not implement a standalone trade
secret law due to the flexibility provided by Article 39 of the TRIPS Agreement.
As the Indian economy expanded post-1995, trade secret protection discussions gained
momentum. India’s joint commitment with the US in 2016 and the National Innovation Bill
(2008) both acknowledged the need for better safeguards. Furthermore, trade secret
protection was also emphasized in the national policy, specifically the 2016 Intellectual
Property Policy.15
It has been recommended by the Law Commission in its 289th report that a structured legal
framework be implemented to safeguard confidential business information through the
Protective Trade Secrets Bill, 2024. As a result, corporations will be encouraged to invest in
research and development by ensuring proprietary data remains protected if this law is
passed. Having strong trade secret laws would also encourage greater technological transfer
and cross-border collaborations, making India more attractive to foreign investors.
Furthermore, businesses may be able to maintain a competitive edge by preventing unfair
commercial practices such as corporate espionage. The bill will enable India to increase
economic growth, create jobs, and align its policies with global best practices by securing
trade secrets.
14
Carol Merriaa Thomson and S Mini, 'Trade Secrets in India – A Comprehensive Study' (2021)
15
Medha Pushkarna, Arnav Jha, and Samarth Dabas, ‘Should There Be a Specific Statute for the Protection of
Trade Secret in India? – An Overview’ (2023) 5(1) Indian JL & Legal Rsch 1
9
6. CONCLUSION
In India's rapidly growing technology industry, trade secret protection and employee mobility
pose a complex challenge. Companies must maintain a competitive edge by safeguarding
confidential information. However, employees have the right to pursue their careers and
apply their knowledge. Since India lacks a specialized trade secrets law, companies are
required to protect their intellectual property through non-disclosure agreements,
confidentiality agreements, and internal security measures.
There are, however, a number of challenges in enforcing non-compete clauses and non-
disclosure agreements in Indian courts due to the lack of statutory recognition. A
comprehensive trade secret law aligned with international best practices provides greater
clarity and stronger enforcement mechanisms for companies in protecting sensitive
information without unfairly limiting employees' rights.
As a result, the proposed Protection of Trade Secrets Bill, 2024 may provide businesses with
stronger legal protections for now. This will result in greater research investments, the
attraction of global companies, and a reduction in trade secret theft. It will, however, be
difficult to ensure that these protections do not unfairly restrict employees' advancement
prospects. The importance of striking this balance is crucial for India in order to continue to
thrive as an innovation-driven economy while maintaining fair employment practices.
7. BIBLIOGRAPHY
1. Robert G Bone, ‘A New Look at Trade Secret Law: Doctrine in Search of
Justification’ (1998) 86 Calif L Rev 241
2. Anna Wendel, ‘Employee Mobility Intentions within a Regional Industry: A Study on High-Tech
Employees’ Perceived Opportunities and Preferences for Mobility within a Regional Industry’ (2020)
3. Difference Between Patent, Copyright, Trademark & Trade
Secret’https://bytescare.com/blog/difference-between-patent-copyright-trademark-
trade-secret. Assessed 30 March 2025
4. Tata Motors ltd. v. State of West Bengal (2015); Delhi HC Richard Brady and Ors. v.
Chemical Process Equipment Pvt. Ltd. and Anr. (AIR 1987 Delhi 372)
5. Zee Telefilms Ltd. v. Sundial Communications, 2003
6. Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber (1995)
10
7. John K Mawdsley and Deepak Somaya, ‘Employee Mobility and Organizational
Outcomes: An Integrative Conceptual Framework and Research Agenda’ (2016)
42(1) Journal of Management 85.
8. Constitution of India, art 19(1)(g).
9. Indian Contract Act 1872, s 27
10. Niranjan Shankar Golokari v. The Century Spinning & Mfg. co. ltd., 1967
11. Zee Telefilms Ltd. v. Sundial Communications (2003) Bombay HC
12. Margo EK Reder and Christine Neylon O’Brien, ‘Managing the Risk of Trade Secret
Loss Due to Job Mobility in an Innovation Economy with the Theory of Inevitable
Disclosure’ (2011) 12 J High Tech L 373
13. Bradford K Newman, ‘Protecting Trade Secrets: Dealing with the Brave New World
of Employee Mobility’ (2007) 17 Bus L Today 25.
14. Carol Merriaa Thomson and S Mini, 'Trade Secrets in India – A Comprehensive
Study' (2021)
15. Medha Pushkarna, Arnav Jha, and Samarth Dabas, ‘Should There Be a Specific
Statute for the Protection of Trade Secret in India? – An Overview’ (2023) 5(1) Indian
JL & Legal Rsch 1
11
