How do you determine whether information is a trade secret?

In Texas, the criteria used to determine whether information is a trade secret is outlined in the Texas Uniform Trade Secrets Act, which was passed in 2013. This act states that a trade secret is any information, including a formula, pattern, compilation, program, device, method, technique, or process that meets three criteria: 1) it derives independent economic value from not being generally known to, or readily ascertainable by, other persons that can obtain economic value from its disclosure or use, 2) the owner has taken reasonable measures to keep the information secret, and 3) the owner has derived economic value from the secrecy of the information. To identify if information meets the criteria of a trade secret, courts generally consider the value of the information to the owner, the extent to which the owner kept the information secret, and the degree of competition that would result if the information was disclosed to the public. Businesses can help protect a trade secret by putting in place measures like nondisclosure agreements and security protocols that restrict access to the information. In conclusion, whether information is considered a trade secret under Texas law depends on a court’s evaluation of the value of the information to the owner, the effort made to keep the information secret, and the amount of competition that could arise from its disclosure.

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