Trade Secrets Law

A trade secret is a formula, process, methodology, ingredient, recipe or information which gives someone economical advantage or market edge over its competitors.


A trade secret should satisfy the following characteristics as per US law:

  • There should be economical advantage in keeping it secret.
  • It is kept secret from the public
  • There is a substantial effort behind keeping it secret.

US Trade Secret Legal Provisions

In United States there are no specific country wise laws for protection of trade secrets. However, each state has its own law for protection of trade secrets derived out of Uniform Trade Secrets Act. All the states have accepted or ratified the Uniform Trade Secrets Act except few states like New York, New Jersey, North Carolina, Texas and Massachusetts.

The main objective behind trade secret is to keep it secret from the competitors. The trade secret owners adopt several measures to keep their trade secrets undisclosed. Legal protection for trade secrets includes Non-Disclosure Agreements and Non-Compete Clause. An employer while employing people may make it mandatory for the candidate to sign such non-disclosure agreements or while entering into business with someone may ask the business partner to sign non-compete clause. Both these agreements carry clauses which levies heavy financial penalty for any violation.

Unlike patent, protection under trade secret legal framework can be enjoyed life long and there is no limitation with respect to timelines.

Another important legal step towards trade secret protection in US is Economic Espionage Act of 1996 which protects against theft or misappropriation of trade secret by making such act a federal crime. The law includes theft or misappropriation for both individual or corporate benefits and benefit of foreign power.

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