The economic value of trade secrets, like other forms of intellectual property (IP), lies in the proprietary competitive advantage gained from use coupled with the exclusion of others from such use. But unlike the right to exclude others from using a patent for a limited period of time, which arises from a government granted monopoly tied to disclosure, the right to exclude others from the use of a trade secret arises from limited disclosure and reasonable efforts to maintain secrecy.
This article explores economic factors relevant to trade-secret development, reverse engineering, and misappropriation as well as the manner in which value creation is shaped by various legal requirements to maintain trade-secret status.
