What Is a Trade Secret? The DTSA, the UTSA & What Qualifies

A trade secret is one of the four main types of intellectual property, alongside patents, trademarks, and copyrights — but it works differently from all of them. There is no application and no registration. Protection comes entirely from keeping the information secret. The classic example is the Coca-Cola formula, protected for over a century not by a patent but by secrecy.

The legal definition

Two laws define trade secrets in the United States. The federal Defend Trade Secrets Act (DTSA) of 2016 created a federal civil cause of action (18 U.S.C. § 1836), and the Uniform Trade Secrets Act (UTSA) has been adopted by nearly every state. Their definitions align on three requirements. Information is a trade secret if:

  • It is information — a formula, process, method, program, technique, customer list, or other business information;
  • It derives independent economic value from not being generally known or readily ascertainable by others; and
  • The owner takes reasonable measures to keep it secret.

All three must be present. Information that is public, valueless, or carelessly handled is not a trade secret.

What can be a trade secret

The category is broad: manufacturing processes, recipes, source code, algorithms, customer and supplier lists, pricing strategies, marketing plans, and research data can all qualify — as long as they are secret and valuable. That breadth is a key advantage over patents, which protect only certain kinds of inventions.

Trade secret vs. patent: the fundamental trade-off

Choosing trade-secret protection means choosing secrecy over disclosure. A patent grants a time-limited monopoly (generally 20 years) in exchange for publicly disclosing the invention. A trade secret can last forever — but only as long as it stays secret, and it offers no protection against a competitor who independently discovers or reverse-engineers it. For a full comparison, see trade secret vs. patent.

The catch

Because protection depends on secrecy, the moment a trade secret becomes public — through a leak, a publication, or lawful reverse engineering — it is gone, permanently. That is why trade-secret strategy is really a secrecy strategy, built on NDAs, access controls, and the reasonable measures the law requires. These topics anchor the Wysebridge trade secret guide.