Trade secret law is seen as the most inclusive IP regime for protecting inventions and proprietary business information. Keep it secret, the wisdom goes, and you can protect it under trade secret law even if patent and copyright law are unavailable. But keeping information secret does not magically transform it into a trade secret. The holder of the secret also must derive actual or potential economic value from concealing the information from others. This elusive and under-studied statutory requirement – called ‘independent economic value’ – is a vestige of the common law, under which trade secrets had to impart a ‘competitive advantage’.
Today, the conventional view is that courts generally ignore independent economic value or give it a rubber stamp. However, this article reveals that, while most courts apply a comparatively low bar, a surprisingly large number find the standard is not met. This casts doubt on the assumption that independent economic value is a toothless, check-the-box requirement.
Along with this descriptive account, the article provides a much-needed explanation of the nature and function of independent economic value in trade secret law …
Hrdy, Camilla Alexandra, The Value in Secrecy (August 2, 2021).