Trade secrets can be the most valuable intellectual property a business holds—and the hardest to protect. Unlike patents and trademarks, trade secrets require no registration and provide no public notice to competitors. Their protection depends entirely on the business taking active, reasonable steps to maintain confidentiality. When those measures fail and a trade secret is misappropriated, the consequences can be catastrophic: lost competitive advantage, lost customers, and lost revenue that may be impossible to fully recover. Revision Legal’s trade secrets attorneys are experts in trade secret law and have both prosecuted and defended trade secret claims in courts across the country.
Trade secret law in the United States operates on two tracks. At the state level, 47 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted the Uniform Trade Secrets Act (UTSA) or a version of it. The UTSA defines trade secrets broadly to include any information—formula, pattern, compilation, program, device, method, technique, or process—that derives independent economic value from not being generally known or readily ascertainable, and that is the subject of reasonable secrecy measures.
At the federal level, the Defend Trade Secrets Act (DTSA), enacted in 2016, created a federal civil cause of action for trade secret misappropriation in federal court. The DTSA largely mirrors the UTSA but adds powerful remedies including ex parte seizure orders and federal court jurisdiction that facilitates multi-state enforcement. Most trade secret cases today are filed under both state law and the DTSA, giving plaintiffs access to both state and federal remedies and the strategic flexibility of choosing federal or state court.
Misappropriation under both the UTSA and DTSA covers two categories of conduct:
Acquisition by improper means: Acquiring a trade secret through theft, bribery, misrepresentation, breach or inducement of breach of a duty to maintain secrecy, or espionage. Hacking into a competitor’s systems to steal source code is the clearest example, but more subtle forms—a sales representative reviewing confidential files they had no authorization to access, a vendor photographing process documentation during a facility tour—also qualify.
Disclosure or use without consent: Disclosing or using a trade secret by someone who knew or had reason to know that the information was acquired through improper means or under circumstances giving rise to a duty of secrecy. The most common scenario is a departing employee who takes customer lists, product formulas, or proprietary code to a new employer.
Trade secret protection is not self-executing. A court will not protect information as a trade secret unless the owner took reasonable steps to keep it secret. What counts as “reasonable” is a fact-specific inquiry, but the following measures form the baseline that courts expect:
A business that fails to implement these measures may find that its “trade secrets” are not legally protected at all, even if competitors have clearly stolen valuable information. Building the right protective infrastructure before misappropriation occurs is as important as having the legal tools to pursue it afterward.
Courts have broad authority to award remedies in trade secret cases:
Courts can enjoin actual or threatened misappropriation—prohibiting the defendant from using or disclosing the trade secret, requiring return or destruction of misappropriated materials, and in some cases imposing “head start” injunctions that prevent a competitor from using stolen information until it could have developed the same information independently.
Actual damages—including lost profits, unjust enrichment of the defendant, and in some cases a reasonable royalty—are available. Under the DTSA, courts can award exemplary damages up to twice the actual damages in cases of willful and malicious misappropriation. Attorney’s fees are available in cases involving bad faith conduct.
The DTSA’s ex parte seizure provision allows a court to order the immediate seizure of property containing misappropriated trade secrets before the defendant can be notified—a powerful tool when there is a credible risk that the defendant will destroy or transfer the evidence before a conventional hearing can be held.
If you suspect trade secret misappropriation, contact an attorney before confronting the suspected infringer or taking unilateral action to recover the information. Digital evidence is fragile and must be preserved through proper forensic processes. An attorney can guide the evidence preservation effort, assess the legal merits, and take immediate legal action—including seeking emergency injunctive relief—if the situation warrants it. Speed matters: the longer a competitor uses stolen trade secrets, the greater your losses and the harder it is to quantify and recover them.
Revision Legal’s trade secrets attorneys handle cases under both the DTSA and state UTSA frameworks. We represent both plaintiffs seeking to recover stolen IP and defendants challenging overreaching trade secret claims. Contact us today for a confidential consultation.
The Defend Trade Secrets Act of 2016, 18 U.S.C. §§ 1836–1839, created a federal private right of action for trade secret misappropriation for the first time. Before the DTSA, trade secret claims were governed exclusively by state law — primarily the Uniform Trade Secrets Act (UTSA), adopted in some form by 48 states. The DTSA did not preempt state law; rather, it layered a parallel federal remedy on top of existing state causes of action, giving plaintiffs the option to plead in federal court based on federal question jurisdiction.
Under the DTSA, a “trade secret” is broadly defined as all forms of financial, business, scientific, technical, economic, or engineering information — including formulas, patterns, compilations, programs, devices, methods, techniques, processes, or procedures — that the owner has taken reasonable measures to keep secret and that derives independent economic value from not being generally known. 18 U.S.C. § 1839(3).
The DTSA authorizes injunctive relief, actual damages, unjust enrichment damages, and in cases of willful and malicious misappropriation, exemplary damages up to two times the actual damages award and attorney’s fees. One notable DTSA feature is the ex parte seizure provision — courts may, in extraordinary circumstances, order the seizure of property without prior notice to the defendant to prevent propagation or dissemination of the trade secret. This remedy is reserved for cases where conventional preliminary injunction relief would be inadequate.
Both the DTSA and UTSA require that the claimant have taken “reasonable measures” to maintain secrecy. Courts examine the totality of circumstances: the existence and scope of nondisclosure agreements with employees and contractors; access controls, including login credentials, tiered permissions, and physical security; confidentiality markings on sensitive documents; employee training programs; and exit interview protocols. A trade secret claimant who shares allegedly secret information broadly, without restriction, and without any NDA will struggle to satisfy this element regardless of how valuable the information is.
Non-disclosure agreements remain the cornerstone of any trade secret program. For employees, NDAs should be signed at hire and should clearly describe the categories of information deemed confidential. For contractors and vendors, NDAs should be mutual only where commercially necessary — one-way protection of your proprietary information is preferable when you have the leverage to insist on it.
Trade secret cases are among the most complex and expensive forms of commercial litigation. Plaintiffs must identify the alleged trade secret with sufficient particularity before discovery begins — a requirement that serves as an early case management tool, but also as a strategic trap for claimants who overstate their claims. Courts in California and other UTSA states require a written designation of trade secrets prior to discovery under statutes like Cal. Civ. Proc. Code § 2019.210.
The preliminary injunction is often the most important motion in a trade secret case. To obtain one, the plaintiff must demonstrate a likelihood of success on the merits, irreparable harm absent the injunction, that the balance of equities tips in its favor, and that an injunction would be in the public interest. When a former employee is alleged to have taken trade secrets to a competitor, courts frequently grant narrow injunctive relief restricting the employee’s use of specific categories of information while the case proceeds.
Courts have allowed trade secret misappropriation damages based on estimated R&D costs. Here’s what this means for how plaintiffs calculate and prove their damages.
Read more about Trade Secret Damages: R&D Cost Estimates Allowed
Using Zoom and other teleconferencing tools for confidential business discussions creates trade secret risks. Here’s how to protect sensitive information during virtual meetings.
Read more about Teleconferencing Software Trade Secret Risks
Courts disagree on whether trade secret owners must prove actual use of stolen information to prevail on misappropriation claims. Here’s the current state of the legal debate.
Read more about Is Proof of Use Required for Trade Secret Claims?