Trade Secrets in India: Protecting Source Code and Algorithms Without a Patent

Your most valuable technology asset may be something no one can see: the source code behind your product, the algorithm that ranks your results, the recipe you use to train a model. Many founders assume that if they haven’t filed a patent, that asset is unprotected. In India, it usually is protected, just not by a statute with the words “trade secret” in its title.

India has no dedicated trade secret law. Protection comes from the equitable doctrine of breach of confidence, contracts, copyright, and the cyber and criminal laws. This guide explains how that patchwork works for source code and algorithms, what you have to do to qualify for protection, how employees and contractors fit in, what the Law Commission’s 2024 proposal would change, and what to do when a secret leaks.

How Indian law protects trade secrets without a statute

India still has no dedicated statutory framework for trade secrets. Protection instead rests on common law, equity and contract, as a June 2026 article from the International Bar Association puts it (IBA). In March 2024, the 22nd Law Commission of India delivered its 289th Report, “Trade Secrets and Economic Espionage”, which recommended special legislation and annexed a draft Protection of Trade Secrets Bill, 2024 (SpicyIP; Mondaq). Commentators report that it hasn’t been enacted, so for now the working law is judge-made.

The central doctrine is breach of confidence. Courts will restrain the misuse of confidential information even where there is no written agreement, because an obligation of confidence can be implied from the circumstances (K&S Partners). Following the English approach, courts generally ask whether the information has the necessary quality of confidence, whether it was shared in circumstances that imposed an obligation of confidence, and whether it has been used without authority. The Delhi High Court has applied these ideas in cases such as American Express Bank v. Priya Puri and Burlington Home Shopping v. Rajnish Chibber, both of which are widely cited in the commentary.

Source code gets two layers of protection. A computer programme is a literary work under the Copyright Act, 1957, so copying the code can infringe copyright. But copyright protects the particular expression, not the underlying algorithm or logic (K&S Partners). Someone who rewrites your code line by line but copies your approach may escape copyright and still be caught by breach of confidence. That is why trade secret protection matters for algorithms, which Section 3(k) of the Patents Act, 1970 also keeps out of the patent system when claimed as an algorithm or mathematical method.

What you must do to qualify for protection

Courts don’t protect secrets that the owner didn’t treat as secret. A plaintiff has to identify clearly the information it says is confidential and show that it was shared in confidence, and a Bombay High Court decision in Beyond Dreams v. Zee also required proof that the information was in fact secret (WTR; Chambers). “All our know-how” won’t do. Founders should keep a simple trade secret register that describes each item, where it is stored, who owns it and who has access. If you ever have to sue, that register is the backbone of your pleading.

Then comes the practical work of keeping things secret. Restrict repository access to people who need it, keep source code off personal email and personal cloud accounts, log downloads, and mark documents and repositories as confidential. If you distribute compiled software, consider obfuscation, and if customers want assurance you won’t disappear, use a source code escrow rather than handing over the code. Separate your crown jewels, such as model weights, ranking logic and pricing engines, from the rest of the codebase so that fewer people can ever see them.

Contracts are the third layer. Use written confidentiality agreements with employees, contractors, vendors and investors that define the confidential information, list the usual exclusions (information already public, independently developed or lawfully received from someone else), require return or destruction on exit, prohibit reverse engineering, and acknowledge that injunctive relief may be needed. Don’t rely on non-competes to do the work of confidentiality clauses: Section 27 of the Indian Contract Act, 1872 makes agreements in restraint of trade void, which is generally read to cover post-employment restraints. Make sure agreements are properly stamped under the applicable state stamp law, because an unstamped document can run into admissibility problems in court.

Employees, contractors and departing developers

Employees owe a duty of confidence during employment, and the duty survives in respect of genuine secrets. But Indian courts have been careful about the line between confidential information and an employee’s general skill and experience. In American Express Bank v. Priya Puri, the Delhi High Court observed that knowledge, skills and experience acquired in the course of employment belong to the employee (IBA). Specific material, such as copies of your customer data or source code, is protectable. A former engineer’s general know-how about building recommendation systems is not.

Contractors and freelancers need extra attention. They aren’t employees, so the Copyright Act’s rule that an employer owns work made under a contract of service doesn’t help you; unless there is a written assignment, the contractor may own the copyright in the code they wrote. Combine an assignment with a confidentiality agreement for every contractor, and make sure the repository they work in is one you control. Many disputes begin when a developer’s personal GitHub account turns out to hold the only complete copy of a module.

Plan departures like you plan hires. Revoke access on the last day, collect devices, remind the person in writing of their continuing confidentiality obligations, and review access logs for unusual downloads in the weeks before they left. Because post-employment non-competes are generally unenforceable in India, a notice period and well-drafted confidentiality terms are your main tools, and post-termination non-solicitation clauses are on uncertain ground. If you hire someone from a competitor, tell them in writing not to bring any of their former employer’s material. Courts have restrained new employers who benefit from a former employer’s secrets.

Remedies when a secret leaks

Speed decides most trade secret cases. The usual first step is a civil suit for an injunction restraining use and disclosure, often with an urgent interim application. Courts can order search and seizure through a local commissioner, direct the defendant to hand over or delete material, and award damages or an account of profits. Delay counts against you, because a court will ask why you waited if the information was so valuable. The Delhi High Court’s Original Side Rules, 2018 allow confidentiality clubs, which limit who may see the secret material in the case so that litigation does not destroy the secret (Mondaq).

Criminal and cyber provisions can run alongside. Unauthorised access to, downloading or copying of data can engage Sections 43 and 66 of the Information Technology Act, 2000, and where the facts support it, offences such as criminal breach of trust and cheating under the Bharatiya Nyaya Sanhita, 2023. A criminal complaint can be useful pressure and can help secure evidence, but courts dislike civil disputes dressed up as crimes, so it should follow the facts rather than lead the strategy.

Evidence is what wins. Preserve forensic images of devices, repository and access logs, email and chat records, and cloud audit trails before anyone deletes them. Electronic records need a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 to be admissible, so have your technical staff or forensic examiner prepare it at the time, not months later. A clean chain of custody makes the difference between an interim injunction and an argument about whether the copying happened at all.

Patent or secret, remedies and quick answers

The choice between a patent and a secret depends on what the asset is. A patent gives a monopoly of up to twenty years in exchange for publishing your invention, and a software-related patent has to clear Section 3(k). A secret has no fixed term and costs little to keep, but it gives no protection against someone who works it out independently or reverse engineers it. You can’t do both for the same detail: once a patent application is published, the disclosed detail is no longer secret. A sensible split is to patent the technical invention that competitors could see from the product, and keep training data, parameters, internal tooling and ranking logic confidential. Watch the legislative position, because a statute would help, but build your protection now on contracts, access controls and records.

Related reading: how to choose between a patent and a secret for blockchain innovations, who owns the AI model, its weights and its datasets, open-source licence audits for startups with Indian developers, using AI tools at work: confidentiality and data leaks, founders’ agreements in India, whether your Indian developer owns your code and patenting software in India under Section 3(k); also NDA enforceability in India and drafting confidentiality agreements and software copyright protection in India; also trade secret remedies when former employees take code.

Quick answers

Is there a trade secret law in India?

No dedicated statute. Protection comes from breach of confidence, contracts, copyright and IT and criminal law. The Law Commission proposed a Trade Secrets Bill in March 2024, but it has not been enacted.

Can I protect an algorithm without a patent in India?

Yes, as a trade secret, if you keep it confidential and take reasonable steps to protect it. Algorithms as such aren’t patentable under Section 3(k), and copyright covers the code’s expression, not the underlying logic.

Can I stop a former employee from working for a competitor?

Generally not. Post-employment non-competes are void under Section 27 of the Contract Act, but you can restrain misuse of your confidential information.

What counts as a trade secret in India?

Any confidential business information with commercial value that its owner has taken reasonable steps to protect, such as source code, algorithms, model weights, customer data or pricing logic. Courts expect you to identify the specific information claimed and show that it was shared in confidence.

What evidence should I preserve if source code is copied?

Forensic images of the devices involved, repository and access logs, email and chat records and cloud audit trails, kept with a clear chain of custody. Electronic records need a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.

Final word

Halverton & Co. is an Indian law firm advising founders, startups, technology companies and investors on Indian law, including trade secret and confidentiality strategy, technology contracts, IP assignment and enforcement against leaks. We practise in Jharkhand, Maharashtra and before the Supreme Court of India, and act as fractional legal counsel for technology-driven businesses. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.

This article reflects developments reported up to late October 2026. It is for general information only, is not legal advice, and does not create an advocate-client relationship. Halverton & Co. is an Indian law firm.