What is a Trade Secret?
Although the definition may vary somewhat from state to state, a trade secret has three basic characteristics:
It is a secret– not generally known by or readily ascertainable to competitors; It confers a competitive advantage on its owner; and It is subject to reasonable efforts to maintain its secrecy.
Although the three definitional elements of a trade secret are relatively simple concepts, each has been the subject of extensive case law interpretation. If a dispute erupts over an alleged wrongful taking of a trade secret -- "misappropriation" -- the analysis over whether each of these elements has been met can become exceedingly complex. Any party seeking to protect a trade secret must keep in mind, from the outset, how it will prove these three elements, if it is forced to do so.