By: Dylan Wiseman
Many US businesses continue to focus upon protecting trade secrets as a crucial part of their intellectual property portfolio. The advantages are obvious: trade secrets can last for an indefinite period of time, companies can be nimbler and avoid educating competitors about technological advancements and trade secrets protection does not present the expensive and time-consuming processes required to maintain a patent portfolio. Given its wealth of technology firms, life sciences companies and AI and machine learning businesses, California was among the early adopters to advance its competitive position by protecting trade secrets.
As the fourth largest economy in the world, California’s laws regarding trade secrets drive its innovation economy.1 California’s economy is obviously a function of its great universities and stellar climate. However, its economy is also driven by the combination of its statutory protection of trade secrets and its laws regarding free and fair competition. Since 1985, California has protected trade secrets through its California Uniform Trade Secrets Act (CUTSA).2 Additionally, since the era of the Gold Rush, California has rejected covenants not to compete between employers and employees.3 For example, in California, an employee can have coffee with their co-workers in the morning, leave to work for a competitor that same day and have happy hour with their new co-workers.4 Thus, California’s definition of a trade secret and its policy favouring employee mobility ignite its economy.
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This article was first published on IAM in March 2025; for further in-depth analysis, please visit the IAM Trade Secrets Hub 2025.”