Legal & IP
Definition
A trade secret is confidential business information — formulas, processes, designs, customer lists, or algorithms — that provides a competitive advantage and is protected as long as it remains secret.
Unlike patents, trade secrets do not require registration and can theoretically last forever, as long as reasonable steps are taken to maintain secrecy. Protection under the Defend Trade Secrets Act (DTSA) and state laws requires that the information has commercial value because it is secret, and that the company has taken reasonable measures to keep it secret (NDAs, access controls, confidentiality policies). Famous examples include the Coca-Cola formula and Google's search algorithm. Trade secrets can be a more practical alternative to patents for some types of information — particularly process innovations that would be difficult to detect if a competitor infringed a patent.
Many companies have valuable trade secrets they are not adequately protecting — no NDAs with employees, contractors, or partners, no access controls, and no documentation of confidentiality measures. An IP or business attorney can audit your current practices and help you put the right protections in place before a key employee leaves or a competitor reverse-engineers your advantage.