We spend most of our time talking with IP teams, both at companies and law firms, about why identifying trade secrets matters and why taking “reasonable measures” is not as hard or expensive as it sounds.
Those conversations usually go well. The legal case is clear, and the business case is clear too. But there is one recurring sticking point: where does the urgency and budget come from to actually do the work
After a lot of these conversations, we have a theory worth testing out loud: M&A might be the use case that moves the trade secret needle from “we should” to “we will.”
Why routine IP work is not pulling the trigger
The challenge is not that trade secret programs are too expensive or too complex to setup. The challenge is that IP teams are already running flat out on patent and trademark portfolios, so trade secret cataloging becomes one more thing on a plate that is already overflowing.
Unlike a patent filing deadline, nobody is sending reminders. There’s usually no hard deadline attached, no immediate business event forcing the issue, and no obvious moment where the organization has to stop and ask, “Do we actually know what our trade secrets are?”
This is not a knock on IP teams. It is just the pattern in routine IP work everywhere: more responsibility, the same headcount, the same budget, and a long list of priorities that naturally crowds out anything without urgency behind it.
Why M&A changes the equation
Now picture the same conversation inside an M&A transaction.
A target company is heading toward an acquisition, and the IP portfolio is about to be reviewed in diligence. Every asset that can be identified, documented, and defended contributes to the story the buy side is being asked to value.
What if that target could bring tens, hundreds, or even thousands of identified and protected trade secrets into diligence, in addition to its patents and trademarks?
The IP portfolio gets materially larger. The asset value story gets stronger. And the conditions that usually stall trade secret work in routine operations are suddenly reversed: there is a real deadline, real money on the line, executive attention, and a clear business case for getting the work done quickly.
That combination is rare in day-to-day IP operations, which is why M&A may be such a powerful forcing function.
Even the acquiring company benefits from having a clear registry of trade secret assets instead of just a fuzzy “goodwill” line item on an assets schedule. Key employees who create valuable trade secrets can be identified and retained. Efforts can be made to preserve trade secrets after the acquisition and prevent this value from walking out the door. It’s a win-win for both sides of the deal.
What this could look like in practice
In the months before a transaction, a target company could work through a structured trade secret identification exercise. Engineering, product, sales, and operations teams would help surface the proprietary information that actually gives the business its edge.
That might include technical know-how, manufacturing processes, customer insights, pricing models, market competitive intelligence, supplier relationships, product roadmaps, data sets, internal workflows, or other confidential information that may never appear in a patent portfolio but still drives real enterprise value.
From there, the company can document reasonable measures taken, clarify ownership and access, and catalog the trade secret asset base into a registry.
The buy side then walks into diligence and sees a more complete IP program, one that includes far more than the patents and trademarks they expected to count. That can change the conversation, and in some cases, it may also change the deal value.
An open question for M&A counsel and diligence teams
It is still early days for trade secrets as a recognized lever in transactions, but the potential is significant. Firms and corporate teams that build this into their pre-transaction playbook may be better positioned to maximize value for their clients and differentiate from the competition.
We would genuinely like to hear from M&A outside counsel and corporate diligence teams: is this the use case that finally gives trade secret management the urgency and budget it has been missing?
If trade secrets could add value in your next transaction, meet with our team.