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I don't see how a small company with actual know how can protect their trade secrets otherwise. Software patents and other legal means seem much worse to me than trying to obfuscate trade secrets. Going open source is not a viable solution for most companies either.

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Why would the company relying on scarcity of knowledge they deem "trade secrets" to gather revenue instead of directly being productive? Expecting unbounded ongoing revenue from a constant amount of work they did once to describe the "trade secrets" into code is extractive and doesn't incentivize future productivity.

It’s still a valid strategy and it makes sense in the current economic system.

It's not really tenable because it just takes someone without a profit motive to reimplement it or something that can substitute for it and the business model breaks. There's countless examples of this.

Any product that requires many years of R&D has to rely on trade secrets or on software patents, since otherwise the company could not possibly compete with copycats who reverse engineer their know how and therefore have zero R&D costs. There is often no other way, not every market is based on constant fake innovation and feature creep.

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