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What is a trade secret?

Generally speaking, trade secrets consist of information and can include a formula, pattern, compilation, program, device, method, technique or process. The definition of “trade secret” differs from state to state, and different statutes of limitations and remedies may apply.

To meet the most common definition of a trade secret, such information must be used in business and provide an opportunity to obtain an economic advantage over competitors who do not know or use it. Trade secrets are available both as a complement to patents, and as a viable alternative where the information to be protected does not qualify as patentable subject matter.

Trade secrets are governed by state law and by the Defend Trade Secrets Act of 2016, which provides a uniform federal cause of action. While state laws differ, they are similar to the extent that almost all states have adopted some form of the Uniform Trade Secrets Act. Courts can protect trade secrets in several ways, including by enjoining misappropriation, ordering parties that have misappropriated a trade secret to take steps to maintain its secrecy, ordering a royalty payment to the trade secret holder, and other equitable relief. Courts may also award damages, trial costs, and/or reasonable attorneys’ fees.

If a trade secret is acquired by improper means (such as reverse engineering or espionage), the acquirer may be subject to legal liability for that improper acquisition. However, a trade secret holder must take reasonable steps to maintain its secrecy. If a trade secret holder fails to maintain secrecy or if the information is independently discovered, becomes released or otherwise becomes generally known, trade secret protection is lost.

What are the benefits of obtaining trade secret protection?

Trade secrets can be very valuable because they may extend for an indefinite period of time, as opposed to patents, which expire after a set period of time. Trade secrets also protect “abstract ideas,” which patents do not. Compared with patent prosecution, obtaining a trade secret is relatively inexpensive and easy. Unlike patents, however, trade secrets do not protect against a third party’s independent discovery or creation. The decision on how to protect an invention that is eligible for either patent or trade secret protection involves weighing the benefits and disadvantages of each type of intellectual property.

Additionally, trade secrets receive broad geographic protection and may be enforced internationally. For example, if a theft of trade secrets occurs abroad, the trade secret holder may seek relief through the U.S. International Trade Commission (ITC) to prevent the importation of competitive products into the United States that are developed as a result of the theft.

Keyhani LLC frequently consults on steps that may be undertaken to protect trade secrets and litigates state and federal trade secret misappropriation actions in court. If you are in need of a trade secret attorney, email us at or call us to speak to one of our attorneys.