Question 1

What qualifies as a trade secret?

Accepted Answer

Three requirements: (1) the information has economic value because it's not publicly known, (2) you've made reasonable efforts to keep it secret, and (3) the information gives you a competitive advantage. Customer lists, manufacturing processes, pricing strategies, algorithms, and supplier terms can all qualify — if you treat them as confidential.

Question 2

How long does trade secret protection last?

Accepted Answer

Potentially forever — as long as the information stays secret. Unlike patents (20 years) or copyrights (life + 70 years), trade secret protection has no fixed expiration. Coca-Cola has protected its formula for over 130 years. But the moment the secret is publicly disclosed — intentionally or accidentally — protection ends.

Question 3

What's the difference between a trade secret and a patent?

Accepted Answer

A patent requires public disclosure of your invention in exchange for 20 years of exclusive rights. A trade secret requires keeping the information confidential in exchange for potentially unlimited protection. Patents protect against independent discovery; trade secrets don't — if someone figures out your secret on their own, you have no claim.

Question 4

What happens if an employee leaks a trade secret?

Accepted Answer

You can sue under the Defend Trade Secrets Act (federal) or your state's version of the Uniform Trade Secrets Act. Remedies include injunctions (stopping further disclosure), damages (actual losses plus the thief's unjust enrichment), and in cases of willful misappropriation, exemplary damages up to 2x the actual damages plus attorney's fees.

Question 5

What are 'reasonable efforts' to protect a trade secret?

Accepted Answer

Courts look for: NDAs with employees and contractors, physical and digital access controls, confidential labeling on documents, employee training on confidentiality, exit interviews that remind departing employees of their obligations, and limiting access to need-to-know personnel. You don't need a vault — but you need more than nothing.

Question 6

Can a customer list be a trade secret?

Accepted Answer

Yes — if it contains information that's not easily discoverable and you've made efforts to keep it confidential. A list of names from a public directory? Probably not. A curated list with purchasing history, pricing tiers, and contact details for key decision-makers built over 10 years? That's a trade secret. The value is in the curation and relationships, not just the names.

Trade Secret

Definition

In Practice

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Frequently asked questions about trade secret

Create a contract with proper trade secret clauses