Trade secret law protects confidential business information that gives a company a competitive advantage. Unlike patents or trademarks, trade secrets are not registered with the government — protection depends entirely on keeping the information secret. Common examples include manufacturing processes, customer lists, formulas, software algorithms, pricing strategies, and business plans.
Disputes in this area typically arise when an employee leaves for a competitor and takes confidential information with them, when a business partner shares proprietary data in violation of a confidentiality agreement, or when someone obtains a company's secrets through hacking, espionage, or other improper means. Courts can order the wrongdoer to stop using the information and may award money damages, including in some cases the profits gained from the misuse.
A key requirement for protection is that the owner must take reasonable steps to keep the information secret — such as using nondisclosure agreements, restricting access, and implementing security measures. Information that is publicly known or easily discovered does not qualify.
Trade secret law is shaped by both federal and state rules. The federal Defend Trade Secrets Act of 2016 created a nationwide civil remedy, but states also have their own laws, most of which follow the Uniform Trade Secrets Act. Specific protections, remedies, and definitions can vary significantly depending on the jurisdiction and may change as courts interpret new technology and business practices.
