In the U.S., the legal definition of a trade secret varies by state law. Generally, there are three components required before most courts would treat a given piece of information as a trade secret:
- The information is not generally known to the public;
- The information confers some sort of economic benefit to its owner (where this benefit is because of the confidential nature of the trade secret);
- The information is treated as a “secret” by its owner.
A trade secret can be: a method of doing business; secret formulas; customer lists; or even contract terms. Perhaps the most important point to remember about trade secrets is that the owner must actually take reasonable steps to ensure that the information will remain a secret. If everyone in the company knew of the information and no special steps were taken to guard the information, most courts would not confer trade secret status on the information.