Fourth Circuit makes clear ‘reasonable efforts’ standard for DTSA Trade Secret Protection

Fourth Circuit makes clear ‘reasonable efforts’ standard for DTSA Trade Secret Protection

“The Fourth Circuit’s decision in Sherbrooke provides important clarity on the ‘reasonable efforts’ standard at the pleading stage, holding that confidentiality agreements alone can suffice to survive a motion to dismiss.”

The most disputed element in establishing a prima facie Defend Trade Secrets Act (DTSA) trade secret misappropriation claim is whether the owner undertook ‘reasonable efforts’ to maintain secrecy. Defendants routinely cite a lack of or poorly implemented security measures as a defence. On November 18, 2025, the U.S. Court of Appeals for the Fourth Circuit in Samuel Sherbrooke Corporate Ltd. v. Mayer offered guidance on what constitutes such measures at the pleading stage, reversing the district court’s dismissal on grounds that the plaintiff failed to take reasonable measures to protect the trade secrets at issue. The decision suggests that limited protective measures are sufficient to survive summary judgment. Beyond providing pleading-stage guidance, the decision also importantly allows trade secret owners to assess whether they are doing enough to protect their trade secrets.

A plaintiff must prove as part of its prima facie case that it has undertaken ‘reasonable efforts’ under the circumstances to maintain the information as a trade secret. Reflecting this understanding, the DTSA and the Economic Espionage Act (EEA) do not define what constitutes a ‘reasonable measure’. The extent of the trade secret owner’s security measures need not be absolute or heroic.

The reasonableness standard ensures that there will be some close cases that entail difficult line-drawing. As a result, only in extreme cases can what is a ‘reasonable’ precaution be determined on a motion for summary judgment because the answer depends on a balancing of costs and benefits that will vary from case to case and so require estimation and measurement by persons knowledgeable in that particular field.

In Sherbrooke, the district court granted the defendants’ motion for summary judgment on grounds that the plaintiff had failed to plausibly allege that they had taken reasonable measures to protect the secrecy of certain proprietary software that the plaintiff alleged constituted a trade secret under the DTSA. The Fourth Circuit disagreed with the district court’s conclusion that an employment agreement, which included a confidentiality provision prohibiting the defendants from disclosing ‘Confidential Information’ that included the proprietary software, is not, as a matter of law, sufficient to demonstrate reasonable efforts to maintain secrecy. The Fourth Circuit found that Sherbrooke “did not need to prove anything. They only needed to plausibly allege that the Proprietary Software was covered by the confidentiality provision, which was a reasonable measure to keep it secret.” The court determined that they did so.