What is the value of a trade secret?

On Behalf of | Jul 10, 2019 | Business Law, Intellectual Property Law |

Any type of secret has value because people always want to try to discover what it is. That is the curious nature of humans. However, trade secrets are special. These are secrets that have a monetary and business value. Sometimes they are the single thing that makes a Georgia business unique, and without the trade secret, there would not be a business. Because such secrets are so valuable in many ways, it can be difficult to place an actual value on one.

According to the American Bar Association, the value of a trade secret really depends on the advantage that it gives your business. For example, the formula for Coca Cola is a well-protected trade secret because if everyone knew the secret, then the company would have no edge over its competitors. Anyone could make the fizzy drink. So, in this case, the trade secret is incredibly valuable and accounts for a large portion of the value of the overall company.

If for some reason, the advantage your trade secret gives you diminishes, then so does its value. For example, if your trade secret is for a food item and someone learns to create a similar food item, then the overall value of your secret would be reduced because people now have a choice between your item or the other person’s item.

Another factor that could affect the value is the demand for your product. If demand reduces, then the trade secret loses value just as your business would lose value. This information is for education and is not legal advice.