A trade secret is any information, formula, pattern, compilation, program, device, method, technique or process, that:
- Is not generally known to the relevant portion of the public;
- Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
- Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The policy underlying trade secret law is to protect the fruits of a company’s investment of time, energy and money from misappropriation, thus protecting the broader societal economic vitality.
Trade secret law effectively allows a perpetual monopoly in secret information, provided that the owner takes necessary reasonable steps to protect the information. Steps include physical protection, non-compete contracts and non-disclosure agreements. A third party is not prevented using the information if it can independently duplicate or reverse engineer the secret.
Trade secret is a reasonable protection strategy where the information cannot be duplicated or discovered by reverse engineering of the product.