Definition
Trade secrets are confidential business information that derives independent economic value from not being generally known or readily ascertainable by others, and that is subject to reasonable efforts to maintain its secrecy. Protection attaches not by registration or disclosure — as with patents or copyrights — but by the owner's ongoing efforts to keep the information from becoming public.
The category is deliberately broad. It encompasses formulas, patterns, compilations, programs, devices, methods, techniques, or processes. Customer lists, pricing data, manufacturing processes, software source code, and marketing strategies have all qualified in various contexts. The critical question is not the type of information, but whether it meets two requirements: independent economic value from secrecy, and reasonable measures to protect it.
A trade secret can be misappropriated in two primary ways: unauthorized acquisition (including theft, espionage, or breach of a duty to maintain secrecy) or unauthorized disclosure or use of information obtained under a duty of confidence.
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Common Language
Modern common usage (Wiktionary): "Trade secret" in ordinary usage refers loosely to any closely guarded business method or recipe — the secret ingredient in a family recipe, a chef's technique, or a company's internal process.
Historical common usage (Webster's 1913): Webster's 1913 does not appear to have carried a dedicated entry for "trade secret" as a legal term, reflecting the concept's relatively underdeveloped status in nineteenth-century American law.
The gap matters: In common usage, "trade secret" suggests mystique and novelty. Legally, novelty is not required — only secrecy and economic value. Ordinary information that a business actively protects and that competitors would pay to know can qualify. Conversely, genuinely novel information that the owner leaves unprotected loses trade secret status. The distinction between "secret" in the popular sense and "secret" in the legal sense — meaning subject to reasonable protective measures — is where researchers and practitioners most often go wrong.
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Common Confusion
Trade secrets are frequently confused with patents, and the confusion runs in both directions. Patents require public disclosure and expire; trade secrets require continued secrecy and can last indefinitely. The Coca-Cola formula is the canonical example of a trade secret that has outlasted the patent term it could theoretically have claimed. A second confusion arises between trade secrets and confidential information generally: not all confidential business information qualifies as a trade secret. The information must have independent economic value from its secrecy — mere embarrassing or sensitive internal communications do not meet the threshold. A third confusion involves employee non-disclosure agreements and trade secret protection: NDAs can reinforce trade secret status, but the existence of an NDA does not automatically mean the covered information constitutes a trade secret under the law.
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Core Elements
For information to qualify as a trade secret under the Uniform Trade Secrets Act (adopted in most states) and the federal Defend Trade Secrets Act (18 U.S.C. § 1836 et seq.), the claimant must establish:
1. The information is not generally known or readily ascertainable through proper means by persons who could obtain economic value from its disclosure or use.
2. The information derives independent economic value — actual or potential — from that secrecy.
3. The owner has taken reasonable measures under the circumstances to maintain the information's secrecy.
For misappropriation claims, the claimant must additionally establish that the defendant acquired, disclosed, or used the trade secret through improper means or in breach of a duty to maintain secrecy.
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Recognized Forms
/SUBTYPES
Courts and commentators have addressed trade secrets in several recurring factual contexts, each with its own body of analysis:
Technical trade secrets: Manufacturing processes, chemical formulas, engineering designs, software source code.
Commercial trade secrets: Customer lists, pricing strategies, supplier terms, marketing plans, business methods.
Employee-related trade secrets: Information that employees learn during employment and are obligated — by contract or implied duty — not to take to competitors. This category drives the bulk of trade secret litigation.
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Why It Matters in Research
Trade secret law has undergone significant structural change in the past decade. Before 2016, trade secret protection was almost entirely a matter of state law, governed by the Uniform Trade Secrets Act in most jurisdictions and common law in others. The Defend Trade Secrets Act of 2016 created a federal civil cause of action for the first time, opening federal courts to trade secret plaintiffs and introducing ex parte seizure as a remedy in extraordinary cases. Researchers working with pre-2016 materials are reading a fundamentally different legal landscape — one without federal civil jurisdiction, without the DTSA's specific definitions, and without the seizure remedy.
A second navigational trap: the UTSA was not adopted uniformly. States enacted it with variations, and a handful of states (including New York, historically) long maintained common law regimes. When reading state cases, confirm whether the jurisdiction had adopted the UTSA at the time of the decision, and check for local modifications.
A third trap appears in employment materials. Trade secret claims frequently travel with non-compete agreements, inevitable disclosure doctrine arguments, and tortious interference claims. Corpus searches on trade secrets in the employment context will surface these overlapping doctrines heavily. Researchers should expect to cross-reference the employment and intellectual property encyclopedia entries together.
The Bouvier's entry, reflecting nineteenth-century doctrine, frames trade secrets almost entirely through the employment relationship — a master-servant confidentiality problem solved by equity. The modern doctrine is far broader, applying equally to corporate espionage, reverse engineering, and third-party misappropriation, but the employment context remains the litigation heartland.
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Historical Dictionary Support
Bouvier's Law Dictionary captures the embryonic state of trade secret doctrine in American law: a rule of equity governing employees who, having been entrusted with confidential business information in exchange for wages, could be enjoined from using or disclosing those secrets for their own benefit or that of a competitor. The reference to 165 Pa. 24 grounds the doctrine in contract-adjacent equity jurisdiction — the employee's agreement not to disclose was consideration for the wage increase, making breach a matter for injunctive relief.
What Bouvier's reflects, and what historical researchers should note, is that nineteenth-century trade secret law was conceptually narrow: it was fundamentally an employer protection doctrine, grounded in the relationship of trust and the exchange of wages for loyalty. The information-property framing that dominates modern doctrine — trade secrets as a form of intellectual property with independent value — is largely a twentieth-century development, consolidated by the UTSA (first promulgated in 1979, revised in 1985) and then federalized by the DTSA. Bouvier's entry does not anticipate corporate espionage, reverse engineering analysis, or the question of what constitutes "reasonable measures" in a digital environment.
The cross-reference to Privacy and Injunction in Bouvier's is instructive: trade secret protection in this era was understood as a subspecies of equitable privacy protection, not a discrete property right. Modern doctrine has moved decisively toward a property-right framing, which affects how remedies are analyzed and how damages are calculated.
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Jurisdictional Note
Federal law (DTSA) now provides a uniform civil cause of action, but state law UTSA claims remain available and are often pled concurrently. State variations in UTSA adoption — including differences in the definition of "misappropriation," the treatment of inevitable disclosure, and the scope of injunctive relief available to restrict employee mobility — remain significant. New York resisted UTSA adoption until 2024 and maintained a common law regime for decades; researchers working with New York trade secret materials prior to that adoption must apply common law standards rather than UTSA analysis.
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Encyclopedia Cross-Reference
Trade Secret Law — Overview, DTSA, and the Uniform Trade Secrets Act (The Law Mind Intellectual Property Encyclopedia)
Trade Secret Subject Matter — What Qualifies as a Trade Secret (The Law Mind Intellectual Property Encyclopedia)
Trade Secrets — The Defend Trade Secrets Act and State Law (The Law Mind Employment & Labor Law Encyclopedia)
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