Private Law Theory

ABSTRACT
Trade secret law is built around a simple economic fact. Information can yield supracompetitive returns only when prospective competitors are prevented from using it – as when it is kept secret from them. A successful trade secret plaintiff must therefore show that the alleged trade secret derives ‘independent economic value’ from not being generally known to others. Yet modern doctrine sometimes treats this value requirement as something else – an inquiry into whether information is ‘valuable’ in the abstract and whether it is independently useful versus dependent on some other information. Part of the reason is simply that proof of trade secret value is difficult. But another part lies in statutory drafting choices that have invited courts to take interpretive detours. Redundancy and indeterminacy in the statutory definitions encourage consideration of ‘value’ as an abstract inquiry that can be proven by plaintiff-centric evidence, such as development costs or ongoing use, or defeated through categorical arguments about what type of information ‘counts’. The result is doctrine that recites the economic logic of trade secrecy while quietly drifting away from it.

The consequences are costly. When ‘value’ loses its competitive referent, trade secret law becomes subject to misuse to protect business investments merely as such, invites unfruitful early motion practice, expands discovery, and turns trade secret remedies into competitive restraints untethered from their innovation- and competition-promoting function. This Article offers two modest corrections that make trade secrecy’s economic core harder to miss: first, it explains how the modifier ‘independent’ functions in the statutory phrase ‘independent economic value’; second, it reframes the trade secret value requirement as an ‘economic advantage’ requirement to place trade secrecy’s key definition in explicitly competitive terms. A trade secret is information that provides actual or potential economic advantage from not being generally known or readily ascertainable by proper means by competitors who could make use of it. With economic advantage as the measure, ‘value’ means what it should – secrecy-derived rents from delayed market entry and imitation.

Dickinson, Gregory M, The Vanishing Economics of Trade Secret Value (March 7, 2026).