Trade Secret Subject Matter

Abstract

Not all secrets held by a business can be legally protected as trade secrets. Yet the boundaries of trade-secret-protectable subject matter have never been well explained. Limitations are implicitly recognized by courts, but the principles upon which these limitations are based are largely unarticulated. A key limitation is that a trade secret must have "independent economic value," but this phrase has been left undefined.

This article articulates the scope of trade secret subject matter. Independent economic value is defined in a way that is in accord with the the decisions of the courts and the bedrock concepts of trade secret law as elucidated by the leading authorities. That definition is then set within an analytical framework. The resulting framework allows courts to make thorough, well-reasoned, and transparent decisions about what prospectively qualifies as protectable subject matter under trade secret law, and what doesn't.

Keywords: trade secret, trade secrets, Uniform Trade Secrets Act, UTSA, independent economic value

JEL Classification: K13