A trade secret is a form of intellectual property that holds inherent economic value because it is not generally known or readily ascertainable by others, and the owner takes reasonable measures to keep it secret. Trade secrets can include formulas, practices, processes, designs, instruments, patterns, or compilations of information. To qualify as a trade secret, the information must be commercially valuable because it is secret, known only to a limited group of persons, and subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.
Trade secrets are not publicly disclosed, and owners seek to protect them from competitors by implementing special procedures for handling the information, as well as technological and legal security measures. In the United States, trade secrets generally encompass a companys proprietary information that is not generally known to its competitors.
To establish a trade secret claim, the subject matter involved must qualify for trade secret protection, the holder must establish that reasonable precautions were taken to prevent disclosure of the subject matter, and the trade secret holder must prove that the information was misappropriated or wrongfully taken.
In summary, a trade secret is confidential information that provides an enterprise a competitive edge and is unknown to others, and it may encompass technical information, such as manufacturing processes, and commercial information, such as distribution methods and advertising strategies.
