What Is Trade Secret Audit and How Does It Work?

Your business runs on ideas. Customer lists, manufacturing methods, software code, pricing models, recipes, and internal processes all carry real value. The trouble is that these assets are easy to take for granted and easy to lose. That is where a trade secret audit comes in.  

At David L. Cohen, P.C., we work with companies to identify, protect, and defend the confidential information that gives them an edge. Led by Attorney David L. Cohen, our firm brings decades of experience in intellectual property, business consulting, and the protection of proprietary information.  

What sets us apart is our practical, business-minded approach. We do not just hand you a legal document and wish you luck. We dig into how your company actually operates, then build protections that fit. Located in New York, New York, we serve clients across the city, throughout the state, and around the globe. No matter where you do business, we are ready to guide you through the process. If you suspect your secrets are exposed, or you simply want peace of mind, we are the team to call. 

What a Trade Secret Audit Actually Is

A trade secret audit is a structured review of the confidential information your company owns and the measures you take to protect it. Think of it as a health checkup for your most sensitive assets. During the audit, we look at what you consider secret, where that information lives, who can access it, and whether your current safeguards hold up. The goal is simple.  

We want to confirm that the things giving you a competitive advantage actually qualify as trade secrets under the law, and that you are treating them in a way that the courts will respect. Many businesses assume their information is protected just because it feels private. In reality, protection depends on the active measures you take. An audit shows you where you stand and where the gaps are before a problem turns into a lawsuit. 

Why Businesses Choose to Run One

Companies come to us for an audit for many reasons. Some are preparing for a merger, acquisition, or round of funding, and investors want proof that the company's valuable information is locked down. Others have just lost a key employee to a competitor and worry about what walked out the door. Some businesses have grown quickly and realize that their security has never kept pace.  

Whatever the trigger, the benefit is the same. You gain a clear picture of what you own and how well you protect it. That clarity supports stronger contracts, smarter hiring practices, and a far better position if you ever need to enforce your rights in court. A documented audit also shows judges and juries that you took your secrets seriously, which matters enormously when you ask them to side with you. 

How the Process Works Step by Step

We start by sitting down with your leadership to understand your business and what you believe sets you apart. From there, we build an inventory of potential trade secrets. This includes technical material such as formulas, designs, and source code, as well as commercial information such as customer data, vendor terms, marketing strategies, and financial projections.  

Once we know what you have, we trace where each piece of information lives, whether on servers, in shared drives, inside email threads, or in someone's head. Next, we examine who has access and why. We review your physical security, your digital safeguards, your password and encryption practices, and the agreements your staff and partners have signed.  

We then test whether each asset truly meets the standard for protection, meaning it has value because it is secret and you take reasonable steps to keep it that way. Finally, we deliver a written report that ranks your risks and lays out clear, practical fixes you can act on right away. 

What We Review and the Risks We Often Find

The materials we examine cover a wide range. We review confidentiality and non-disclosure agreements, employment contracts, contractor arrangements, vendor and licensing agreements, employee handbooks, IT policies, and your onboarding and exit procedures. Along the way, we tend to uncover the same recurring problems.  

Many companies have outdated, poorly drafted, or never-signed agreements. Others grant far too many employees access to sensitive files with no real reason. We frequently find departing workers with passwords still active or copies of important data in their possession.

Sometimes the issue is simply that nobody ever marked the information as confidential, which weakens any future claim. Spotting these weaknesses early gives you the chance to fix them on your own terms rather than scrambling after a breach. 

New York Laws That Shape Trade Secret Protection

If your business operates in or out of New York, the legal framework here matters a great deal. New York does not follow the Uniform Trade Secrets Act, which many other states have adopted. Instead, our courts rely on common-law principles drawn from the Restatement of Torts and decades of case law.  

To protect a trade secret here, you generally must show that the information has value, is not widely known, and that you took reasonable measures to guard it. That last requirement is exactly what an audit helps you prove. On top of state law, the federal Defend Trade Secrets Act gives you the option to bring certain claims in federal court, which can be a strong tool for businesses with reach beyond our borders.  

Because New York leans so heavily on what counts as reasonable protection, the documented steps you take today can decide whether you win or lose tomorrow. We keep your safeguards aligned with both state and federal standards so you are ready either way. 

Business Consulting Attorney Serving New York and Worldwide

At David L. Cohen, P.C., we help businesses protect the confidential information that drives their success. Our attorney brings deep experience in trade secret audits, intellectual property, and business consulting tailored to your goals. We serve clients in New York, New York, and worldwide. If you are ready to safeguard your most valuable assets and strengthen your legal footing, contact our office today.