Trade secret laws were designed to protect legitimate innovation. But in recent years, they’ve become a convenient weapon for established companies to bludgeon competitors and former employees. A well-funded plaintiff can allege “misappropriation” based on vague claims about “confidential know-how,” tie up a rival in costly discovery, and send a chill through the labor market.
That kind of litigation abuse is especially potent because “trade secret” is such a flexible concept — almost anything could qualify if it’s valuable and not widely known. Fortunately, the law still imposes limits. To win, a plaintiff must show that it took reasonable measures to maintain secrecy, that the information has independent economic value, and that the defendant misappropriated it rather than discovering it independently.
Under the Defend Trade Secrets Act of 2016 (DTSA), a “trade secret” means:
“All forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—
(A) the owner thereof has taken reasonable measures to keep such information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”
— 18 U.S.C. § 1839(3)
South Carolina’s version of the Uniform Trade Secrets Act (SCTSA) adopts a similar definition, but the state’s courts have added a distinctive edge: the requirement of “eternal vigilance.” Under that doctrine, a company must show ongoing, active efforts to preserve secrecy—periodic review of confidentiality policies, renewed NDAs, and a pattern of enforcement. Passive or symbolic efforts won’t suffice.
That vigilance standard often turns a plaintiff’s sword into a boomerang. When a company claiming “stolen secrets” can’t demonstrate consistent protection, its case collapses under the weight of its own neglect.
In the next post, I’ll explore what “reasonable steps” actually look like—from employee NDAs to access controls—and how courts evaluate them. Later in this series, we’ll tackle the outer edge of trade secret protection: reverse engineering—a lawful, often misunderstood practice that defines the limits of secrecy itself.
