The Top 5 Things to Know About Trade Secret Law

Trade secret law is a complex area of law that’s governed by both state and federal statutes. It’s also a field that’s often misunderstood or unknown to many business owners and entrepreneurs. To protect the intellectual property of their businesses, individuals need to understand the basics of trade secret law, including the five most important aspects to consider.

1. Definition of a Trade Secret

A trade secret is defined as information that’s kept confidential and gives a business an economic advantage over its competitors. It can include any information, such as a formula, process, device, or other type of business information that’s not generally known to the public. To qualify as a trade secret, the owner must take reasonable steps to keep the information confidential.

2. Trade Secret Protection

Trade secret protection is provided by both state and federal law. Under the federal Defend Trade Secrets Act of 2016, trade secret owners can file civil lawsuits against those who misappropriate their information. Depending on the circumstances, criminal penalties may also be imposed. On the state level, laws provide protection for trade secrets, such as the UTSA (Uniform Trade Secrets Act).

3. Misappropriation of Trade Secrets

Misappropriation is defined as the unauthorized disclosure or use of someone else’s trade secret. This can include intentional disclosure or use, as well as negligent disclosure or use. It’s important to note that the misappropriation of a trade secret does not require an intent to gain an economic advantage. It’s also possible for a trade secret to be misappropriated even if the person who discloses or uses the information was not aware of the trade secret’s confidential nature.

4. Remedies for Trade Secret Misappropriation

The remedies for trade secret misappropriation vary depending on the circumstances. In some cases, the owner may be entitled to monetary damages, such as lost profits, royalties, or other compensation. In other cases, an injunction may be issued to prevent the misappropriator from using the trade secret. In some cases, the misappropriator may be ordered to return the trade secret information to the owner.

5. Nondisclosure Agreements

To protect their trade secrets, many businesses require employees, contractors, and other individuals to sign nondisclosure agreements. These agreements set forth the obligations of the parties with regard to the trade secret information, such as not to disclose or use the information without the owner’s consent. In some cases, nondisclosure agreements may be combined with non-compete agreements to further protect the business’s interests.


Trade secret law is a complex area of law that can have a significant impact on businesses. To protect their intellectual property, business owners need to be aware of the five most important aspects of trade secret law. This includes understanding the definition of a trade secret, the protection provided by state and federal law, the definition of misappropriation, the remedies for misappropriation, and the use of nondisclosure agreements.

Saturday, 15 June 2024