question.jpgIn Trade Secrets

What kind of value does a trade secret need to have?

To be entitled to trade secret protection, information must have economic value to its owner. Another requirement for information to be entitled to protection is that it cannot be readily ascertainable, which relates to the “economic value” requirement because information which is readily ascertainable cannot have that much value in its secrecy. As a result, where information is relatively cheap and easy to get, it is generally considered to lack the requisite economic value necessary for trade secret protection.

More specifically, when courts analyze whether information has the necessary economic value, in addition to looking at its direct financial value to its owner, they also look at the costs of developing the purported trade secret, any licensing fees associated with it, the costs of securing and protecting the secret, whether anyone attempted to acquire (and/or succeeded in acquiring) the information. While most states simply require that the information provide its owner with some type of economic value, a few states take this a step further - in these states, for information to be entitled to trade secret protection, it must not just have economic value to its owner but it must also provide its owner with a distinct competitive advantage.