Contract Glossary

Trade Secret

Definition

A trade secret is confidential business information that's valuable because nobody else knows it. Coca-Cola's formula. Google's algorithm. Your client list that took 10 years to build. Unlike patents, trade secrets have no expiration, as long as you keep them secret.

In Practice

You've developed a proprietary pricing algorithm that gives you a 15% edge over competitors. To maintain trade secret protection, you need to actively protect it: require NDAs from anyone who sees it, restrict access to need-to-know employees, label documents as confidential, use access controls on your servers, and include confidentiality clauses in every employment and contractor agreement. If you share the algorithm at a conference without an NDA, you may lose trade secret protection entirely.