Trade Secrets Valuation

A trade secret does not expire until the trade secret is no longer secret. This can provide a lot of value to owners of some types of trade secrets. But, a trade secret usually cannot be enforced against a third party that reverse engineered a particular product or type of software without any improper use of a trade secret. Also, a trade secret often cannot be enforced if the alleged trade secret can be shown to be in the public domain or is otherwise shown to be well known (e.g. it is the subject of a published article or the subject of a patent, etc.).

For such reasons, certain types of information may have limited value as a trade secret. A particular configuration of a physical product can often be easily reverse engineered, for example (e.g. the shape of a can used to hold a product, the design of a chair tilt mechanism, a mechanical design that can be understood by viewing that design in a particular product, etc.). Such information may have limited commercial value as a trade secret after such a product is publicized or offered for sale due to the ease with which such information may be obtained by reverse engineering activities.

On the other hand, information that may be difficult to reverse engineer can often have significant value. For instance, a secret recipe for a great tasting food product or a manufacturing process that provides a significant commercial advantage may provide more value as a trade secret than as a patented invention if the trade secret is difficult to reverse engineer.