Tools of the Trade (Secrets): Not Everything Makes the Cut

In our last post, we covered the trials and tribulations of companies that treat confidential information the same as trade secrets and pay the price for it. Today, we are covering the next consideration when establishing trade secret protections: how do you determine what is trade secret-worthy or not? 

Why It Matters

• Not everything confidential is a trade secret, and over-designating is a fast way to protect nothing. 

• Effective triage requires asking two questions, one legal and one business, rather than collapsing them into a single blanket designation. 

• A recent Seventh Circuit decision illustrates the consequences of vague, over-broad trade secret claims and explains why a shorter, sharper list can be beneficial in court and beyond. 

It is critical to not build bigger walls around everything by applying the required trade secret protections to all confidential information. Rather, it is important to decide what belongs inside those walls. This means triage: separating the assets that are genuinely trade secret-worthy from the ordinary confidential information that flows through your business every day, and committing your protection to the former. 

Two Questions, Not One

The mistake starts with treating “is this a trade secret” as a single question. It is two.

• The first is the legal question: could this asset actually survive the test courts now apply, secrecy, specificity, value, and reasonable measures, if you had to prove it in court?
• The second is the business question: is this asset worth the operational overhead of a real program, the segmentation, role-based access, logging, explicit communication of secrecy, and offboarding?

Put differently, a trade secret designation is a resource-allocation decision as much as a legal conclusion. Your company has a finite budget for information security, finite appetite for operational friction, and finite bandwidth for enforcement. Spreading those resources across hundreds of loosely defined “trade secrets” dilutes the protection available for the handful of assets that truly drive competitive advantage. A disciplined business lens forces you to ask: is the cost to protect the information as a trade secret worth it? If the answer is no, the asset probably does not belong on the trade secret list, even if it could meet the legal standard in theory.

Collapsing these two questions into one and answering it with “everything is confidential and a trade secret” is problematic. As previously discussed, uniform treatment of trade secrets and confidential information can be fatal.

So How Do You Actually Choose?

Here is the good news: the first step in categorizing can be a short repeatable screen you can run in a working session.

1. Can you describe it with specificity? A specific source code module, a pricing model, a formulation, a training data set, not “our technology” or “our methods.” Courts have made clear that a plaintiff cannot identify a kind of technology and then invite the court to hunt through the details for something that qualifies.
2. Is it actually secret? Carve out anything public, anything reverse-engineerable from the shipped product, and anything that is industry standard.
3. Does its value depend on staying secret? If the advantage disappears the moment it becomes public, it belongs in the trade secret bucket. 
4. Does it produce identifiable economic advantage? Trade secrets should be assets for which you can clearly identify and articulate the competitive edge they provide. If that is difficult, a useful practical check is to ask: What information would you most want to keep out of competitors’ hands? Or, which information took the most time, expense, iteration, or hard-earned lessons to develop? Those answers can help separate information that is merely confidential from information that may have real trade secret value.
5. Are you willing to run the program around it? Segmentation, role-based access, logging, explicit secrecy communication, offboarding; at least the minimum we laid out in the last post.
6. What is the purpose of the trade secret protection? Is it to ensure the asset never becomes public? To demonstrate value to potential buyers, acquirers, or licensees? Knowing why you are protecting something shapes how you protect it.

None of this requires a finished legal analysis on day one. The first step is simply categorization, and that is well within reach of any team willing to sit down and sort honestly. The harder calls, whether a close candidate actually meets the legal standard and how to build the protections that make it provable, can come into focus once that first cut is done. The order is what matters: categorize first, confirm what is genuinely protectable, then put the program in place. Run that screen honestly and confirm what is protectable and you might land in an enviable position: a short list, maybe five to twenty true trade secrets that a trade secret management program can be built around. That is the right shape of a portfolio. It is not a failure of completeness.

The Everything-Is-A-Trade-Secret Problem

If that sounds like under-protecting, consider what over-designation can do in court. 

NEXT Payment Solutions, Inc. v. CLEAResult Consulting, Inc., 163 F.4th 1091 (7th Cir. 2026). 

• Background: NEXT claimed that 34 individual modules and five combination modules of its software, its “FAST Tool,” were trade secrets, giving the court a title and a description of what each feature does and its purpose. 

• Holding: Summary judgment for the defendant. The court found that NEXT identified no specific algorithms, source code, or methodologies underlying the FAST Tool, and instead defined its modules in vague and generic language describing what the software does. That lack of detail made it impossible to distinguish the aspects of the tool that were generally known and readily ascertainable from those NEXT contended were secret and derived value from being kept secret. 

• Takeaway: A long inventory of assets framed in vague, functional language does not clear the bar. Under the DTSA, a plaintiff must draw a clear line between what is genuinely secret and what is generally known, and describing what a product does rather than the specific know-how behind it leaves the court unable to find that line. Volume is neither a substitute for precision nor for value.

A smaller but sharply defined, identified, protected list is not just more efficient to have as a trade secret portfolio, but may also be more credible to a court. 

It Pays Off Outside the Courtroom, Too

Litigation is not the only place this matters.

1. M&A and financing: A buyer or investor doing IP diligence wants a defined list of crown jewels with a documented protection history. A clean trade secret schedule, what it is, how it was protected, who had access, what offboarding looked like, accelerates diligence and supports valuation. 
2. Foundation for the broader IP trade secret program: A short, well-defined list of core trade secrets becomes the anchor for everything else, the access controls, the employee training, the NDA architecture, the offboarding checklists from the last post. It is far easier to build a real program around ten clearly identified assets than around an undefined universe.
3. Cost discipline: Unlike a patent, a trade secret carries no government-imposed maintenance fee. The ongoing cost is operational hygiene. Done correctly, that hygiene can have minimal upkeep cost for the trade secrets which can protected indefinitely.

Pick Well, Pick Deliberately, and Pick Both

The arc of this series is simple. The test is coming. Confidentiality is not enough, and there is a minimum program you need to have in place. And now: you do not have to protect everything that way. You have to pick well and pick deliberately.

If you have questions about how to identify, prioritize, or protect your company's trade secrets, or would like to discuss the implications for your business, contact your regular Mintz attorney or the authors of this article.

Subscribe To Viewpoints