Demystifying trade secrets

How to make this important IP right work for you

Businesses can win or lose based on how well they manage the intangibles that reside throughout the organization. A 2021 global Economist Intelligence Unit survey shows that the cost of failure is significant, with lost business and reduced competitive advantage the greatest concerns of C-suite executives. And threats are looming. Corporate leaders say cyber security weaknesses and employee leaks pose the most serious risks to their “crown jewel” assets. The “Great Resignation” in corporate America has further raised the stakes, putting firms at significant risk of their key intangibles and information walking out the door to competitors.

Many intangible assets are best protected by trade secrecy, a form of IP protection that applies to information that is not publicly known, has economic value, and which the owner makes reasonable efforts to keep secret. Yet our conversations with corporate executives show that while they consider trade secrets very important, few are taking meaningful steps to protect them. The inability to employ trade secrets puts firms at significantly heightened risk of losing their intangible assets to competitors. It also puts firms at increased risk of misusing the trade secrets of third parties. 

Download the paper below to explore how companies can protect their intangible assets using trade secret protection. Discover practical insights on how to qualify for trade secret protection, five reasons why business leaders should consider trade secrets, and a framework for implementation.

Demystifying trade secrets
Trade secrets are often a company’s most valuable form of IP. Explore a five-part framework for effective trade secret protection.

While trade secrets are often a company’s most valuable IP, they are not obtained like other forms and therefore demand a fundamentally different approach to protection. In the case of trade secrets, the creation and the legal right are inextricably linked. There is no application process that an attorney can handle on behalf of and independent of the creators. Instead, the trade secret right exists only insofar as the underlying creation remains a secret. Usually, the creation is a business asset that is used every day, such as a software algorithm. Since protection depends on secrecy, it is business owners who must take responsibility for achieving and maintaining secrecy. Legal plays a key role, but ultimately, it is the business who must assume responsibility for protecting their asset.

Why trade secrets matter, according to executives:



Top consequences of trade secret theft

52% Loss of business

51% Loss of competitive advantage

42% Reputational damage

37% Disruption to operations



Top threats

49% Weaknesses in cyber security

48% Employee leaks

27% Competitive intelligence

26% Third-party service provider leak

Source: The Economist Intelligence Unit, Open secrets: Guarding value in the intangible economy (May 2021)

Contact us

Oommen Thomas

Oommen Thomas

IP Consulting Practice Leader, KPMG US

+1 415-963-8125
Justin Rerko

Justin Rerko

IP Transformation Leader, KPMG US

+1 202-236-0588