Fifth Circuit Emphasizes Need for Proof of Trade Secrets’ Economic Value and Effort Required to Create Compilation

Why It Matters

The ruling tightens the evidentiary bar for trade‑secret claims, especially when information is publicly obtainable, signaling that mere compilation effort does not confer protection. Organizations must proactively safeguard data to avoid losing trade‑secret protection.

Key Takeaways

• No secrecy measures made training materials non‑secret.
• Plaintiff failed to produce actual client list evidence.
• Publicly available member data cannot be protected as trade secret.
• Effort to compile data insufficient without economic value from secrecy.
• Concurring judge saw secrecy but found no misappropriation evidence.

Pulse Analysis

The Fifth Circuit’s decision in Associated Professional Educators of Louisiana v. EDU20/20 clarifies how courts apply the Defend Trade Secrets Act and state equivalents. By emphasizing that secrecy is a core element, the panel rejected A+PEL’s claim that its training curriculum qualified as a trade secret because it was shared with participants without confidentiality obligations. The opinion also underscored the necessity of demonstrating that information derives independent economic value from being hidden, a standard that public‑record‑based data rarely meets.

For nonprofits and service providers, the ruling serves as a cautionary tale. Client lists and member databases, even when assembled over years, must be protected through robust confidentiality agreements, restricted access protocols, and documented security measures. Simply compiling data from publicly available sources does not create a protectable asset. Companies should consider encrypting databases, limiting employee access, and marking sensitive files to establish a clear chain of custody that can be presented as evidence of secrecy in future litigation.

The broader impact extends to trade‑secret litigation strategy nationwide. Courts are increasingly scrutinizing the economic value of secrecy and the plaintiff’s efforts to maintain it, rather than accepting the mere difficulty of compilation. Litigants must be prepared to produce concrete evidence—such as internal policies, nondisclosure agreements, and audit logs—to satisfy the heightened burden. This decision signals that without such safeguards, defendants can more readily obtain summary judgment, reducing the risk of costly, protracted disputes over information that is effectively in the public domain.