A trade secret is legally defined as confidential business information that gains economic value from not being generally known and is protected through reasonable efforts to keep it secret. In U.S. law, this definition is most clearly articulated in 18 U.S.C. § 1839, part of the Defend Trade Secrets Act (DTSA).
📘 Core Legal Elements of a Trade Secret
Under federal law, information qualifies as a trade secret if it meets all three of these requirements:
Secrecy — The information is not generally known or readily ascertainable through proper means by others who could benefit from it.
Economic value — The information has actual or potential economic value because it is secret. Competitors would gain an advantage if they obtained it.
Reasonable measures — The owner takes reasonable steps to maintain its secrecy (e.g., NDAs, access controls, secure storage).
If any one of these elements' stops being true, the information loses trade secret protection.
🧩 What Counts as a Trade Secret?
Trade secrets can include virtually any type of business, technical, or scientific information, such as:
Formulas (e.g., beverage recipes)
Processes or manufacturing methods
Algorithms
Customer lists
Designs or prototypes
Negative know‑how (failed experiments that reveal what doesn’t work)
The law covers both tangible and intangible information, regardless of how it is stored.
🏛️ Authoritative Legal Definition (DTSA)
Under 18 U.S.C. § 1839(3), a trade secret includes “all forms and types of financial, business, scientific, technical, economic, or engineering information… if (A) the owner has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value… from not being generally known.”