Trade Secret Protection: Why a Trade Secret You Can't Prove May Not Exist

Trade secret disputes often succeed or fail on evidence rather than suspicion. A recent U.S. case, Applied Predictive Technologies (APT) v. MarketDial, demonstrates a fundamental challenge in trade secret protection: if a business cannot clearly identify what its trade secret is, prove when it existed, and show who had access to it, the courts may be unable to enforce its rights.

When a Trade Secret Claim Falls Apart

APT alleged that former consultants had used confidential information to create a competing business. On the surface, the claim appeared strong: the individuals had access to sensitive information and later launched a rival product. However, the court found that APT had failed to precisely define the trade secrets it claimed were misappropriated.

The company could not clearly demonstrate:

• What specific information constituted the trade secret.
• When that information existed in the claimed form.
• Who had access to it.
• What information was actually disclosed to the defendants.

Without a clear evidential foundation, the court concluded there was insufficient proof that protectable trade secrets existed or that any misappropriation had occurred. The claim was dismissed and substantial legal costs were awarded against APT.

Our Perspective: The Difference Between Knowing and Proving

This case highlights a misconception that still exists across many organisations: that secrecy alone creates protection.

In reality, trade secret rights depend on being able to demonstrate the existence, ownership, and handling of confidential information. Businesses often focus heavily on restricting access to information but spend far less time creating a robust record of what the information actually is.

The challenge is that trade secrets are intangible by nature. When disputes arise years later, organisations are often forced to reconstruct evidence retrospectively. By that point, memories fade, records are incomplete, and the definition of the "secret" itself can become blurred.

"The lesson from APT v. MarketDial is simple: evidence created at the time information is developed is significantly more valuable than explanations created after litigation begins."

Building Evidence Before You Need It

By creating immutable, time-stamped records of intellectual assets and their associated activities, Etched enables organisations to establish:

• What information existed at a specific point in time.
• Who had access to it.
• When disclosures occurred.
• How confidential materials were used and managed.

Rather than attempting to define a trade secret retrospectively, businesses can point to a clear evidential record that already exists.

Importantly, this benefits both sides of a dispute. For rights holders, it helps demonstrate ownership and misuse. For those accused of misappropriation, it can provide evidence of independent development or prove that confidential information was never accessed.

Etched is not a legal remedy in itself, it's the evidential infrastructure that allows legal rights to be substantiated.

The Future of Intellectual Asset Protection

The implications of this case extend far beyond trade secrets.

Across intellectual property, intellectual asset management, and emerging areas such as AI-generated content, the same principle continues to emerge: legal rights are only as strong as the evidence supporting them.

As businesses become increasingly dependent on intangible assets, courts will continue to demand greater clarity around provenance, ownership, access, and use. Organisations that build evidential certainty into their processes will be better positioned to protect and enforce their rights.

APT v. MarketDial serves as a reminder that the future of intellectual asset protection is not simply about creating rights—it is about proving them.