TLDR:
A trade secret is confidential business information that derives commercial value from being kept secret and is subject to reasonable measures to maintain its secrecy. Trade secret protection differs fundamentally from patent protection: it can last indefinitely as long as secrecy is maintained, but loses protection upon public disclosure.
Legal Framework
Major frameworks include: the US Defend Trade Secrets Act (DTSA, 2016, creating federal civil remedies for misappropriation), state-level Uniform Trade Secrets Act (UTSA) adopted by most US states, EU Trade Secrets Directive (2016/943), and in Türkiye the Decree-Law No. 551 (now superseded) and applicable provisions of the Turkish Commercial Code and Code of Obligations. The general elements of trade secret protection are consistent across jurisdictions: information must be secret, have commercial value from being secret, and be subject to reasonable confidentiality measures.
Trade Secret vs. Patent Decision
Founders frequently choose between trade secret and patent protection for technical inventions. Trade secrets favor: indefinite duration, lower upfront cost, no disclosure obligation, protection of process knowledge that cannot be reverse-engineered. Patents favor: protection against independent invention, broader prohibition on use, ability to license, established legal framework for enforcement. The choice depends on whether the invention can be kept secret post-deployment (manufacturing processes often can; product features rarely can).
Practical Trade Secret Protection
Effective trade secret programs include: identifying and documenting specific trade secrets, restricting access on a need-to-know basis, NDAs with employees and partners, IT security controls (access controls, audit logs, DLP), confidentiality marking and handling procedures, exit interviews and IP assignment verification when employees depart, and contractual restrictions on departing employees (within enforceability limits of jurisdiction). For startups, trade secret programs are foundational—the company’s most valuable assets are often unpatentable know-how and customer data.