Trade secret law does not ask whether your information was actually kept secret. It asks whether you took reasonable measures to keep it secret, meaning precautions proportionate to the value of the information and the circumstances of your business. The standard is reasonable, not perfect and not optimal, and it is a question of fact that a judge or jury decides after the theft, looking backward at what you did before it.
This is the element that decides cases. Everything else in a misappropriation claim depends on someone else’s conduct: whether a defendant took the information, how they took it, what they did with it. Reasonable secrecy measures are the one element entirely within the owner’s control, entirely in the past by the time a lawsuit starts, and entirely unfixable afterward.
Two statutes state it in nearly identical terms. The federal Defend Trade Secrets Act defines a trade secret at 18 U.S.C. § 1839(3)(A) as information for which “the owner thereof has taken reasonable measures to keep such information secret.” The Uniform Trade Secrets Act, adopted in some form by nearly every state, requires that the information “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
Note the structural point that trips people up: this is part of the definition of a trade secret, not a defense and not a remedies question. Information that was not the subject of reasonable measures is not a trade secret. It does not matter how valuable it was, how obviously confidential it felt, or how badly the defendant behaved. The claim collapses at the threshold, and the defendant’s conduct is never reached.
The second statutory phrase does the real work: “under the circumstances,” and its federal cousin, “reasonable.” Both are relative terms. Neither sets a floor that every company must clear identically.
The canonical explanation is Judge Posner’s in Rockwell Graphic Systems, Inc. v. DEV Industries, Inc., 925 F.2d 174 (7th Cir. 1991). Rockwell made printing presses and kept engineering drawings in a vault, gave them only to engineers who had signed confidentiality agreements, and put confidentiality terms in its vendor contracts. Copies still leaked, in volume, and the district court granted summary judgment against Rockwell on the theory that a company whose drawings escaped that freely could not have been taking reasonable efforts.
The Seventh Circuit reversed, and the reasoning is the framework courts still use. Rockwell could obviously have done more. More precautions always exist. But every additional precaution costs money and, just as importantly, costs friction: engineers who cannot get drawings cannot build presses, and vendors who cannot see specifications cannot quote. The question is whether the marginal security a further step would buy exceeds what that step would cost. Optimal security is therefore not maximum security. A firm that achieved perfect secrecy would almost certainly have spent past the point where the secret was worth keeping.
Posner also gave the affirmative reason the requirement exists at all. Precautions are evidence. A company that guards information is telling the court, in conduct rather than argument, that the information has value and is not generally known. A company that guarded nothing is either lying about the value or has already let the information into the public domain by inattention. The measures prove the secret.
The same intuition runs the other direction in E.I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970), where photographers hired by an undisclosed third party took aerial shots of a half-built methanol plant from an airplane. DuPont was not required to roof an unfinished building against aerial surveillance. Reasonable precautions guard against discovery by fair means. They do not have to anticipate every unfair one.
Because reasonableness is relative, the same set of measures can pass for one company and fail for another. Courts calibrate against roughly four variables.
The measures courts actually enumerate are unglamorous and repeat across opinions: confidentiality agreements with employees, contractors, and vendors; access on a need-to-know basis rather than company-wide; marking or otherwise identifying what is confidential; password protection, network segmentation, and device controls; physical restrictions on sensitive areas; written policies plus training that tells employees which categories of information are covered; and exit interviews with return of company property and devices. No single item is required. The absence of all of them is fatal.
Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp. 3d 888 (N.D. Ill. 2019), is the instructive failure. A longtime president left to build a competing abrasives business and took files on pricing, customers, and suppliers. On those facts the misappropriation looked obvious. The court denied a preliminary injunction anyway, because the plaintiff had taken almost no measures at all: no confidentiality agreements with the employees who had the information, no real confidentiality policy beyond a vague handbook line telling employees not to discuss company business outside work, no marking of the sales and financial files at issue, no restrictions on who could reach the shared drive or what they could do with it, and no training. The court’s phrase was that the company showed an “almost total failure to adopt even fundamental and routine safeguards.” Having done nothing, it had nothing to enforce.
Compare Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714 (7th Cir. 2003), where a small toy developer disclosed its concept in a meeting with no written NDA. The Seventh Circuit held that an oral understanding of confidentiality, in that context, was enough to let a jury find reasonable efforts, and it stressed that reasonableness is ordinarily a fact question not suited to resolution as a matter of law.
The two cases together state the real rule. There is no checklist that guarantees a win, because the standard is contextual and goes to the jury. But there is a floor, and doing nothing is below it. The asymmetry is what makes this element worth attention: reasonable measures are cheap to install in advance and impossible to install once the information is gone.
What are reasonable measures to protect trade secrets? Reasonable measures are the precautions a trade secret owner takes to keep information secret, judged against what a sensible owner of information of that value would have done in that situation. The Defend Trade Secrets Act, at 18 U.S.C. § 1839(3)(A), requires that the owner have taken reasonable measures to keep the information secret, and the Uniform Trade Secrets Act uses the parallel phrase “efforts that are reasonable under the circumstances.” Typical measures include confidentiality agreements, need-to-know access limits, marking, password and network controls, physical security, vendor confidentiality terms, and exit procedures.
Do trade secret owners have to use perfect security? No. Reasonable is a deliberately lower standard than absolute or optimal. In Rockwell Graphic Systems v. DEV Industries, 925 F.2d 174 (7th Cir. 1991), Judge Posner explained that more precautions always cost more, so the question is whether the added security would have been worth the added expense. Perfect security is not the goal, because a company that spent enough to reach it would be destroying more value than it protects.
Is an NDA enough to establish reasonable measures? Usually not by itself, and not automatically. Confidentiality agreements are the single most cited measure and their absence is close to fatal, but courts look at the whole system. An NDA signed by everyone while the information sits on an open shared drive with no access limits, no marking, and no exit procedure tends to read as paper compliance. Conversely, in Learning Curve Toys v. PlayWood Toys, 342 F.3d 714 (7th Cir. 2003), the Seventh Circuit held that an oral confidentiality understanding, with no written NDA at all, could support a jury finding of reasonable efforts.
Can a trade secret case be dismissed for weak security? Yes, and this is the element where claims fail most often. In Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp. 3d 888 (N.D. Ill. 2019), the court denied a preliminary injunction because the plaintiff showed an almost total failure to adopt even fundamental and routine safeguards: no confidentiality agreements with the relevant employees, no marking of the files at issue, no access limits, and no real confidentiality policy beyond a vague handbook line. Without reasonable measures the information is not a trade secret at all, so the defendant’s conduct never gets examined.
Going further: The Reasonable Secrecy Measures Checklist .
This page is general legal information, not legal advice, and it does not create an attorney-client relationship.
A former president took CGW's pricing and customer files, yet the court denied an injunction because the company took almost no measures to guard the data.
Seventh Circuit affirmed summary judgment against a plaintiff that shared technology with no NDA: zero precautions fails the reasonable-measures test.
The Seventh Circuit refused to enforce a confidentiality agreement because the company took no other steps to guard its tablet-enclosure designs, holding that an NDA without reasonable secrecy measures is worthless.
The Second Circuit affirmed dismissal of a software trade-secret claim because the owner delegated access control to a licensee and never required anyone downstream to keep the secret.
An Eastern District of Virginia bench trial inventoried what reasonable measures look like in practice, then found misappropriation in only two of eighteen alleged disclosures.
The Eighth Circuit held that proprietary markings and confidentiality agreements were enough to keep aircraft-overhaul documents secret, even though much of their content was publicly available.
The Seventh Circuit reversed summary judgment to hold that whether a trade-secret owner took 'reasonable' precautions is almost always a jury question turning on the balance of costs and benefits.
