Trade secrets are among the most valuable assets a business can own, often providing a significant competitive advantage in the market. Since it is inevitable to share a part of confidential information when conducting businesses, it has become a market standard to sign non-disclosure agreements (NDAs, or CDAs) in order to protect one’s confidential information. While NDAs are a fundamental instrument to protect intangible business assets, these agreements alone are rarely sufficient to safeguard trade secrets.
An effective trade secret protection strategy requires more than an NDA. An NDA may restrict how information can be used or disclosed, but it does not automatically give that information trade secret status. To benefit from trade secret protection, a company must be able to show that the information is secret, has commercial value because of that secrecy, and is subject to reasonable protective measures.
In practice, this means identifying the information that genuinely matters, limiting access to it and putting appropriate contractual, organisational and technical safeguards in place.
The starting point is therefore to determine what actually qualifies as a trade secret.
To understand how to protect trade secrets, we must first define what a trade secret is. Examples of trade secrets include:
- manufacturing methods and production techniques;
- software source code and algorithms;
- customer and supplier databases;
- pricing models and sales strategies;
- product formulas and recipes;
- marketing plans;
- R&D data;
- business processes and internal procedures;
- research and development results;
- financial forecasts and investment strategies;
- proprietary artificial intelligence models and datasets.
Trade secrets are confidential information that derive economic value from not being generally known or readily accessible to competitors. They may include technical, commercial, financial, organizational, or operational information that gives a business a competitive advantage. Not all confidential information possesses independent economic value – unlike trade secrets. Whereas confidential information is protected primarily by contracts, statutory mechanisms (such as the Polish Act on Combating Unfair Competition 1993 or Trade Secrets Directive 2016) protect trade secrets in addition to contracts.
Unlike patents, trademarks, or industrial designs, trade secrets do not require registration with a government authority. Their value lies in remaining secret.
To be able to rely on statutory protection, trade secrets must meet all therequirements for the protectable subject matter laid down in the respective legislation. Article 2(1) of Trade Secrets Directive 2016 specifies that an information will be treated as a Trade Secret if it is:
(a) a secret (so, if the information is not generally well-known and easily accessible in the industry);
(b) has some commercial value because of being a secret; and
(c) that all the reasonable steps have been made to keep it a secret.
This means that it must be proven, that the confidential information has been a subject to certain safety provisions so as not to be accessible in the common general knowledge of a particular industry. Article 11(2) of the Polish Act on Combating Unfair Competition 1993 prescribes that a trade secret is defined as technical,technological, or organizational information of a company, or other information ofeconomic value, which, as a whole or in a specific combination or collection of its components:
(a) is not generally known to persons normally dealing with this type of information; or
(b) is not readily accessible to such persons,
provided that the person authorized to use or dispose of the information has, with due diligence, taken steps to maintain its confidentiality.
One of the most common misconceptions among entrepreneurs is that valuable information automatically becomes a trade secret. As established above, both legislations provide a criterion for a trade secret owner to show that they have taken all the reasonable steps in order to protect the information in question from unauthorised use. Although these requirements are present in both pieces of legislation, there is no clear indication on what is meant by the said ‘reasonable steps’. Therefore, the interpretation of that concept was left to the courts across the different jurisdictions. As a result, courts assess reasonableness on a case-by-case basis.
Reasonable measures may include:
- contractual measures, such as confidentiality agreements (NDAs) or contractual obligations imposed on contractors and business partners;
- organizational measures, such as restricted access policies, employee training on confidentiality, internal confidentiality policies;
- technical measures, such as password protection and encryption, or physical security measures;
- document classification systems;
- cybersecurity controls;
If a company cannot demonstrate that it genuinely attempted to protect its confidential information, courts may refuse to recognize that information as a legally protected trade secret. Courts generally expect businesses to adopt a risk-based approach rather than a one-size-fits-all solution. Highly valuable information (such as source code, manufacturing processes, algorithms, customer pricing strategies, or R&D data) typically warrants more robust protection than routine business information.
As such, many companies develop a trade secret protection strategy that combines contractual, organizational, technical, and compliance measures. Such a program not only strengthens the protection of confidential information but also helps demonstrate that the business has taken the “reasonable steps” required under the law.
For this reason, companies of every size—from startups to multinational corporations—should treat trade secret protection as a strategic business priority rather than merely a legal obligation. Ultimately, effective trade secret protection is not about reacting to breaches—it is about preventing them.