Certified Protection Professional (CPP) Practice Exam

What constitutes a trade secret?

1. A widely known formula or information

2. Any publicly available information

3. A formula, pattern, or device used for competitive advantage

4. Information shared with competitors

The correct answer is: A formula, pattern, or device used for competitive advantage

A trade secret is defined as any formula, pattern, device, or compilation of information that is not generally known or readily accessible to the public and that provides a competitive advantage to its holder. This encompasses proprietary information that is crucial for businesses to maintain a competitive edge in the marketplace. It must be kept confidential and not disclosed to others to retain its status as a trade secret. In contrast, widely known formulas or information, publicly available information, and information shared with competitors do not meet the criteria for trade secrets, as they lack the element of secrecy and competitive advantage essential to defining what constitutes a trade secret. Therefore, the correct option highlights the specific characteristics that make something a trade secret, emphasizing the importance of exclusivity and competitive benefit.