In its simplest terms, a trade secret is information which a business wants to keep secret, because keeping the information secret helps the business or the release of the information could harm the business and help its competitors. Unfortunately, application of the trade secret law is a good deal more difficult than stating what it does. There is no federal trade secret law, although some statutes provided similar protection in certain limited circumstances. Trade Secret law exists solely based on state statute or, in a few cases such as New Jersey, on common law.

However, over half the states have now adopted a version of the Uniform Trade Secrets Act, including Ohio, Michigan, Kentucky and Indiana. This act defines a trade secret and the types of remedies the courts may provide for misappropriation of a trade secret. For the most part, the damages include actual monetary damages as well as injunctive relief to prevent further use of a misappropriated trade secret.

The two most contested issues in trade secret are 1) whether certain information meets the definition of what can be a trade secret and 2) whether the business which is claiming the trade secret has undertaken sufficient efforts to a) let those who are aware of the information know it is considered a trade secret and b) whether the business has taken reasonable efforts to protect the information.

Very often businesses believe they have protected a trade secret by having employees, or others who are going to learn of the secret, sign a confidentiality agreement. However, having a confidentiality agreement is worthless if the business then fails to treat the information as a secret. Even with a confidentiality agreement, a document which may be considered a trade secret, will lose its protection if the company fails to treat the information as a true secret.

Don't expect a client list to be a trade secret when the list is published as a promotional piece, to show potential clients. Financial plans are not going to be considered a trade secret when they are left unguarded, on a desk overnight or are taken home by employees at night, with no sign out procedure or any means to track the information.

Once information loses its trade secret status, it can not be made into a trade secret once again. Therefore, any business which believes it has trade secrets worth protecting must follow the procedures necessary to assure the protection. While there are other issues which make proving a trade secret very difficult, it will be impossible if the business fails to treat the information as a secret.

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