As companies deploy AI-driven platforms, analytics systems, and data-powered services, much of their competitive advantage now lives in internal documentation, deployment methods, proprietary workflows, and institutional know-how — not just patents or source code.
Trade secret protection is often assumed to safeguard that advantage. In practice, however, many technology organizations struggle to clearly distinguish between what is truly proprietary and what reflects common industry practice. When that distinction breaks down, even sophisticated products and extensive documentation may fail to qualify as legally protectable trade secrets.
Defining What Is Truly Secret
While courts consider multiple factors when evaluating trade secrets, one requirement is often overlooked. Whenever a company seeks trade secret protection, it must clearly define what distinguishes its trade secrets from publicly known information.
Generally, the question is what distinguishes your trade secrets from common industry practice. Failing to do so can significantly weaken a company’s position in court. For a company or individual defending against trade secret theft allegations, forcing the suing company to identify how its trade secrets differ from general industry knowledge can be a powerful defense.
Trade Secret Case Study: Lessons from APT v. MarketDial
One recent dispute involving a predictive analytics platform illustrates how this issue plays out in practice.
In a dispute between APT (acquired by MasterCard) and MarketDial (Applied Predictive Technologies Inc. v. MarketDial, Fed. Cir. Jan. 28, 2026), APT alleged that two consultants who had access to APT’s materials later founded MarketDial, a direct competitor, prompting APT to file a trade secret misappropriation lawsuit.
APT built and licensed a predictive analytics platform, Test & Learn (T&L), for retailers and large enterprises. The company cited its Standard Deployment Guide (SDG), Partner Capabilities Briefing (PCB), and customized data feeds within T&L as alleged trade secrets.
APT lost the case because the court faulted APT for failing to move from high‑level labels (“SDG”, “PCB”, “custom data feeds”) to a precise articulation of what within those assets was truly secret and not readily ascertainable by others.
For example, APT did not isolate specific algorithms, workflows, parameterizations, or configurations that it claimed as trade secrets. APT also asserted that the “compilation” of features and processes in its materials was secret.
However, the court found that APT never identified which specific details in its materials constituted the actual secrets and were distinguishable from public knowledge. The court commented at the hearing that it should not have to wade through hundreds of pages of documents or a 70-page slide deck to determine the alleged trade secrets.
Despite having sophisticated software and extensive documentation, the APT dispute offers a clear warning: If you can’t articulate precisely what in your product, documentation, or data architecture is non‑obvious and non‑public, your “secret sauce” may not be legally protectable when it matters most.
Strategic Takeaways
Broad Trade Secret Descriptions Are Not Enough
Generally speaking, “our deployment methodology” or “our data model” is not a defensible trade‑secret definition. Some courts permit a business, at the outset of a case and throughout discovery, to rely on such broad definitions. However, by the time a party reaches summary judgment (and the latter stages of a case), the business must specify how its trade secrets are distinguishable from what is publicly known.
In California, you will generally have to provide that level of specificity from the outset of the case, or the court will dismiss the case.
Practical Guidance for Defining Trade Secrets
- Identify specific components, including algorithms, approaches, testing outcomes, and parameter choices
- If relying on combinations of elements, define how the sequence or integration differs from typical industry practice
- Explain why the trade secret was non-obvious at the time it was developed
- Demonstrate how the approach cannot be easily replicated using publicly available information
- Stay abreast of industry knowledge through conferences, industry groups, whitepapers, talks, and marketing
- As discovery progresses, tighten and focus the trade secret list on specific, defensible items rather than broad categories
Protecting What You Define
For technology leaders, trade secrets are no longer merely a legal designation — they define your competitive advantage but only when their boundaries are clearly understood and protected. Technology leaders need to enact operational discipline and create internal documentation to capture analytics workflows, AI models, and deployment processes.
The APT dispute demonstrates that sophisticated technology alone is insufficient. Companies that cannot precisely define what makes their systems non-public and non-obvious risk losing protection when disputes arise. Aligning technical documentation, governance practices, and security controls around those definitions is now essential for protecting modern technology businesses.