Trade Secret Litigation Checklist for Defendants

1. Statute of Limitations May Provide an Early Defense: Determine when the alleged misappropriation was or should have been discovered to assess whether some or all claims are time-barred.
   
   
2. Trade Secrets Must Be Clearly Identified and Protectable: Evaluate whether the plaintiff has identified the alleged trade secrets with sufficient specificity and shown that the information was reasonably protected and derives value from its secrecy.
   
   
3. Misappropriation and Related Claims Require Factual Support: Examine whether the complaint plausibly alleges improper acquisition, use, or disclosure and whether related contract claims, state-law claims, or requested relief are adequately supported.

Introduction

The initial stages of a trade secret litigation can be crucial for a company faced with allegations of trade secret misappropriation. Quickly and effectively assessing the merits of a complaint can save valuable company resources, time, and reputational harm.

The primary governing authority for federal misappropriation claims in the United States is the Defend Trade Secrets Act (“DTSA”), enacted in 2016. 18 U.S.C. §§ 1836 –1839. State law misappropriation claims often include similar substantive elements to the DTSA, which most states embody in a version of the Uniform Trade Secrets Act (“UTSA”). Despite the universal aspirations of the UTSA, there are important differences among states’ versions.

Below are key considerations for defensive strategies and early motion practice when evaluating a complaint.

I. Is the Claim Barred by a Statute of Limitations?

• Does the applicable statute of limitations (DTSA or UTSA) bar some or all claims?

• When did the plaintiff discover, or reasonably should have discovered, the alleged misappropriation?

• Are there allegations of fraudulent concealment?

Under the DTSA, a civil action may not commence later than three years after the date the misappropriation is discovered. 18 U.S.C. § 1836(d). The “discovery rule” provides that the statute of limitations does not begin to run until the misappropriation “is discovered or by the exercise of reasonable diligence should have been discovered.” Id. The UTSA also has a three-year statute of limitations.

A misappropriation claim asserted after the statute of limitations has passed is subject to dismissal. See, e.g., Walker Products, Inc. v. Wilsey et al., No. 5-25-cv-02940, 2026 WL 1455457, at *3 (C.D. Cal. Apr. 13, 2026) (“[Plaintiff] was clearly suspicious of Defendants’ misappropriation of its trade secrets in December 2021. . . . Having waited to file suit until almost four years later in November 2025, [Plaintiff’s] misappropriation claims against Defendants are time-barred.”). Additionally, a continuing misappropriation constitutes a single claim of misappropriation for purposes of the statute of limitations. 18 U.S.C. § 1836(d).

One potential exception is the fraudulent concealment doctrine, which “tolls” the statute of limitations if the defendant has allegedly concealed its misconduct. The concept of fraudulent concealment, however, does not come into play when a plaintiff is already on notice, either actual or constructive, of the alleged misappropriation.

II. Is the Plaintiff the Owner of the Alleged Secret With Standing to Bring the Claim?

• Does the plaintiff own the alleged trade secret?

• Is there any assignment, licensing, joint-development, or contractual issue affecting ownership?

• Does the plaintiff have standing to sue?

Lack of standing or ownership of the alleged trade secret may be grounds for dismissal. The DTSA uses the term “owner” to establish who may bring a civil action for misappropriation. U.S.C. § 1836(b)(1). “Owner” is statutorily defined as “the person or entity in whom or in which rightful legal or equitable title to, or license in, the trade secret is reposed.” U.S.C. § 1839(4); see Zabit v. Brandometry, LLC, 540 F. Supp. 3d 412 (S.D.N.Y. 2021) (dismissing for lack of standing as complaint was “devoid of any facts even suggesting that Zabit has any sort of expectant interests giving rise to ‘equitable title’”).

III. Are There Any Jurisdictional Issues in the Complaint?

• Does the court have personal jurisdiction over the defendant?

• Is venue proper?

• For DTSA claims, does the complaint adequately allege a trade secret related to interstate or foreign commerce?

Under the DTSA, an owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service “used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1) (emphasis added).

In Gov’t Emps. Ins. Co. v. Nealey, the court noted that the “‘interstate commerce’ requirement is jurisdictional[,]” and that “for the DTSA specifically, Congress vested federal courts with original jurisdiction to decide civil cases involving misappropriation of trade secrets ‘if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.’” 262 F. Supp. 3d 153, 172 (E.D. Pa. 2017).

Although the DTSA expressly grants federal courts original jurisdiction over misappropriation claims, state courts may also hear DTSA claims. See Beijing Neu Cloud Oriental Sys. Tech. Co. v. IBM Corp., 110 F.4th 106, 115-116 (2d Cir. 2024) (“We hold that the New York Supreme Court would have been competent to adjudicate the DTSA claim. We presume, consistent with our ‘system of dual sovereignty,’ that ‘state courts have inherent authority, and are thus presumptively competent, to adjudicate claims arising under the laws of the United States.’”).

IV. Is the Alleged Information a Protectable Trade Secret?

• Does the alleged information qualify as a trade secret under applicable law?

• Did the plaintiff take reasonable measures to maintain secrecy?

• Were non-disclosure agreements (“NDAs”), confidentiality agreements, or access restrictions in place?

• Was the information adequately protected through company policies, security controls, or confidentiality markings?

• Does the information allegedly derive independent economic value from its secrecy?

A “trade secret” under the DTSA means information that the owner has taken reasonable measures to keep secret and that is valuable because it is unknown to others. 18 U.S.C. § 1839(3). The alleged “secret” can encompass 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 regardless of how stored, compiled, or memorialized. Id.

Whether information qualifies as a trade secret is usually a question of fact, but “courts dismiss claims involving trade secrets where it is clear that the information at issue is not actually secret or there is no discernible economic value from that information not being generally known.” Catalyst Advisors, L.P. v. Catalyst Advisors Inv’rs Glob. Inc., 602 F. Supp. 3d 663, 672 (S.D.N.Y. 2022).

The adequacy of a plaintiff’s protective measures is generally a question of fact. Although absolute secrecy is not required, courts will generally look for evidence such as confidentiality policies and agreements, internal information classification and control guidelines, and other legal or physical efforts used to protect the secret. ATS Grp., LLC v. Legacy Tank & Indus. Servs. LLC, 407 F. Supp. 3d 1186, 1199 (W.D. Okla. 2019).

It is important to note that even if the plaintiff voluntarily discloses the trade secret without an NDA, it is possible for a claim to proceed, for example, when the defendant fraudulently induced the disclosure. See App-Order LLC v. Reynolds, No. 25-cv-18783-WJM-MAH, 2026 WL 1430106, at *1–2, *5 (D.N.J. May 21, 2026).

To assess “economic value,” courts generally look for whether the “[a]lleged trade secret conveys a competitive advantage and cannot be readily duplicated from generally available information.” Garvey v. Face of Beauty LLC, 634 F. Supp. 3d 84, 97 (S.D.N.Y. 2022). Mere “marketing strategies, or mere knowledge of the intricacies of a business do not rise to the level of a trade secret.” Id.

It is also helpful to show why competitors could not have duplicated an alleged trade secret from generally available information. See GMH Cap. Partners v. Fitts, No. 24-CV-00290 (ER), 2025 WL 950674, at *8 (S.D.N.Y. Mar. 28, 2025); see also Universal Wellhead Servs. Holdings, LLC, v. Berry, No. 2:25-cv-00233, 2026 WL 1045083, at *3–4 (S.D. W. Va. Apr. 17, 2026) (“[T]he ‘independent economic value requirement’ and . . . the ‘reasonable secrecy requirement[]’ are linked[,] because the information’s value lies in the competitive advantage over others that [the plaintiff] enjoys by virtue of its exclusive access to it.”).

V. Did the Plaintiff Properly Identify the Alleged Trade Secret?

• Does the complaint identify the trade secret with sufficient particularity?

• Does the complaint provide sufficient notice of what information was allegedly misappropriated?

• Are the allegations limited to broad categories of information rather than specific secrets?

• Does the alleged trade secret include a combination of public and non-public information?

The alleged trade secret owner bears the burden of “defining the information for which protection is sought with sufficient definiteness to permit a court to apply the criteria for protection” and “must disclose the allegedly misappropriated trade secrets with reasonable particularity.” Olaplex, Inc. v. L’Oreal USA, Inc., 855 Fed. Appx. 701, 711–12 (Fed. Cir. 2021). This burden is crucial not just so the defendant can prepare its challenge to the alleged secrecy by receiving fair notice and concrete identification of the plaintiff’s claim, but also for the court’s “fair adjudication of what was actually used by the defendants.” Id.; see also Neural Magic, Inc. v. Meta Platforms, Inc., 659 F. Supp. 3d 138, 167–68 (D. Mass. 2023) (granting summary judgment where plaintiff failed to meet its burden of defining its trade secrets “with clarity that can be understood by a lay person”). This is especially true in cases involving highly complex trade secrets, where “[c]ourts and juries also require precision because […] the district court or trier of fact will not have the requisite expertise to define what the plaintiff leaves abstract.” InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 658 (9th Cir. 2020).

For these reasons, the required level of specificity in a given case is highly fact-dependent. In Imax Corp. v. Cinema Techns., Inc., the court rejected the argument that the plaintiff achieved specificity by merely claiming “every dimension and tolerance that defines or reflects [the] design” of a sophisticated projector system as trade secrets without concrete identification of the “precise numerical dimensions and tolerances” that were used. 152 F.3d 1161, 1167 (9th Cir. 1998). Likewise, in IDX Sys. Corp. v. Epic Sys. Corp., the court held that “a 43-page description of the methods and processes underlying and the inter-relationships among various features making up IDX’s software package” was not specific enough in separating alleged trade secrets from any “other information that goes into any software package” or identifying “which aspects are known to the trade, and which are not.” 285 F.3d 581, 583–84 (7th Cir. 2002).

Additionally, if a plaintiff alleges ownership of a trade secret that it claims is a “unique” combination of elements, then the alleged owner “should specifically describe what particular combination of components it has in mind, how these components are combined, and how they operate in a unique combination,” and it “cannot be left to pure speculation and conjecture.” Struthers Sci. & Int’l Corp. v. Gen. Foods Corp., 51 F.R.D. 149, 153 (D. Del. 1970) (emphasis added); see also InteliClear, LLC, 978 F.3d at 658 (stating that “[p]laintiffs must ‘clearly refer to tangible trade secret material instead of referring to a ‘system which potentially qualifies for trade secret protection.’”) (emphasis in original).

Determining whether information is public is a question of fact. In some cases, however, a company may have trade secret protection on certain aspects of a product even if other aspects are known to the public; this is often the case when a company has certain features patented and thus disclosed to the public but keeps other aspects of the item a trade secret. This can be a difficult line for plaintiffs to draw, and the failure to distinguish a trade secret from general knowledge may be grounds for dismissal. See Phoenix Co., Inc. v. Castro-Badillo, No. CV 23-1371, 2024 WL 3742368, at *3 (D.P.R. Aug. 9, 2024) (determining that plaintiff failed to distinguish a trade secret from general knowledge because plaintiff merely stated that the accounting software had an innovative data storage design and a wide range of modules); see also Coastal Elec. Constr., LLC v. Jernigan, No. 25-1295-GBW, 2026 WL 1078697, at *3 (D. Del. Apr. 21, 2026) (granting dismissal where “Plaintiff merely listed broad categories of ‘information and strategies,’ ‘processes,’ ‘plans,’ and ‘templates,’ which fail[ed] to put Defendants on proper notice of what items those information and strategies, processes, plans, and templates, could actually be”).

Additional examples of insufficiently pleaded secrets potentially include, depending on the facts: (i) customer information; (ii) proposal templates and operational plans; and (iii) financial information and strategies. Esha Rsch., LLC v. RLH Assets, LLC, No. 3:25-cv-00880-AB, 2026 WL 1121951, at *11–12 (D. Or. Apr. 24, 2026).

It is important to note that if a plaintiff fails to show that it possessed a trade secret by not identifying the secret with sufficient specificity, then a court will not reach any remaining issues of misappropriation or the assessment of damages.

VI. Is There a Plausible Allegation of Misappropriation?

• Has the plaintiff adequately alleged acquisition, disclosure, or use of the trade secret?

• Are the allegations based on speculation rather than facts showing actual use or disclosure?

• How has the plaintiff alleged that the defendant acquired the trade secret?

• Has the plaintiff alleged “improper means” to acquire the alleged trade secret?

• Can the defendant establish reverse engineering, independent derivation, or any other lawful means of acquisition?

• Was the information obtained from public sources, third parties, or lawful means considered public?

• Is there evidence that the alleged information predates any access to the plaintiff’s alleged trade secrets?

Misappropriation is defined as either the acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means, or the disclosure or use of a trade secret without the owner’s consent. 18 U.S.C. § 1839(5)(A)-(B).

To prove misappropriation under the DTSA, a plaintiff must show that: (i) it possessed a trade secret; (ii) the defendant misappropriated the trade secret; and (iii) the trade secret implicates interstate or foreign commerce. 18 U.S.C. § 1836(b)(1). Misappropriation is generally a mixed question of law and fact.

“Improper means” is statutorily defined as “theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means” but explicitly does not include “reverse engineering, independent derivation, or any other lawful means of acquisition.” 18 U.S.C. § 1839(6)(A)-(B). This definition is interpreted by courts to mean, generally, that the plaintiff has the burden of proving an “exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant.” Harbor Bus. Compliance Corp. v. Firstbase.io, Inc., 152 F.4th 516, 530 (3d Cir. 2025).

The DTSA does not explicitly define the term “use,” and it is interpreted broadly by courts. See Oakwood Lab’ys LLC v. Thanoo, 999 F.3d 892, 909 (3d Cir. 2021) (defining “use” as “marketing goods that embody the trade secret, employing the trade secret in manufacturing or production, relying on the trade secret to assist or accelerate research or development, or soliciting customers through the use of information that is a trade secret”). At the pleading stage, a defendant’s “use” may be shown by direct and/or circumstantial evidence. See Leavitt Great West Insurance Services, LLC v. Theriault et al., No. 6-25-cv-00024, 2026 WL 926183, at *9 (D. Mont. Apr. 6, 2026) (holding that “use” is adequately pled when a plaintiff shows access to trade secrets combined with subsequent behavior that would be implausible to achieve without that information); see also Alpha Card Servs., LLC v. Toombs, No. 25-cv-4907, 2026 WL 1161448, at *11 (E.D. Pa. Apr. 29, 2026) (“The implication of use, especially at the pleading stage, can flow from circumstantial evidence alone.”).

Additionally, the “inevitable disclosure” doctrine provides that plaintiffs may prove a claim of trade secret misappropriation “by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.” PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995). The applicability and details of this doctrine are jurisdiction-dependent.

Certain trade secret defenses may also shift the burden of proof during the course of the litigation. For example, “it is necessary [for the plaintiff] to disprove independent development—when raised—in order to meet the burden of proving the element of use.” Harbor Bus. Compliance Corp., 152 F.4th 516, 530. It is crucial to raise any available defenses to a misappropriation claim as early as possible in the litigation because most of them require extensive fact-finding in the first instance by a district court, and typically courts do not make findings of fact on appeal.

VII. Are There Any Related Contract Law Issues?

• Is there a written NDA, confidentiality agreement, employment agreement, consulting agreement, or other relevant contract?

• Did the agreement expressly prohibit things such as: use, disclosure, reverse engineering, independent development, retention of information and documents, or solicitation of customers or employees?

• Is the agreement enforceable?

• Was the agreement properly executed?

• Are there any formation defenses (lack of consideration, lack of authority, ambiguity)?

• Are any non-compete, non-solicitation, or confidentiality provisions enforceable under applicable law?

• Does the contract define “confidential information” more broadly than the alleged trade secret? Are there exclusions for certain “types” of information?

• Are there provisions preserving pre-existing intellectual property?

• What specific obligations did the defendant allegedly breach, and are those obligations still in effect?

Breach of contract claims (e.g., from NDAs, non-compete agreements, non-solicitation agreements, and employment agreements) are usually pleaded as ancillary claims to misappropriation. It is crucial to carefully evaluate each specific contract that might have implications for the survival of the misappropriation claim. See Analog Techs., Inc. v. Analog Devices, Inc., 105 F.4th 13, 19 (1st Cir. 2024) (affirming there was no misappropriation because confidentiality obligations had expired and a later agreement released the defendant from any use restrictions).

VIII. Are There Any Related Causes of Action or Preemption of State Law Claims?

• Are unfair competition, fiduciary duty, tortious interference, or other ancillary claims properly supported?

• Are any state-law claims preempted by the applicable UTSA?

Tortious interference with business is commonly pleaded alongside trade secret claims. Under the DTSA, these claims are not preempted. 18 U.S.C. § 1838. But under the UTSA, “conflicting tortious interference, restitutionary, and other laws of [a] State providing civil remedies for misappropriation of a trade secret” may be preempted. Effect on Other Law Unif. Trade Secrets Act § 7.

IX. Can the Plaintiff’s Prayer for Relief be Challenged?

• Has the plaintiff plausibly alleged actual damages?

• Has the plaintiff adequately alleged unjust enrichment or entitlement to a reasonable royalty?

• Is there evidence supporting irreparable harm and any requested injunctive relief?

• Has the plaintiff established a causal connection between the alleged misappropriation and its claimed damages?

Weak causation or speculative damages may create leverage for dismissal, summary judgment, or settlement. Therefore, it is important to analyze whether the complaint plausibly alleges actual damages, unjust enrichment, a reasonable royalty, or injunctive relief.

In Mallet & Co. Inc. v. Lacayo, for example, the court vacated the grant of a preliminary injunction for a misappropriation claim under the DTSA, even when “the Defendants’ conduct appear[ed] deceitful,” because while some information falling within the categories of Mallet’s business information may have included trade secrets, there was still “a fair probability” that many of the categories also included information that were not protectable as trade secrets. 16 F.4th 364, 382 (3d Cir. 2021). As shown by this case, a misappropriation claim under the DTSA that is not adequately identified may itself be a sufficient basis to dispose of a request for a preliminary injunction and allow the defendant to resume its activities.