Lecture 34: Trade Secrets and Protection

[Music] What is trade secret protection and why is
it important? Trade secret protection is an alternative
to patent or trademark law that allows for intellectual property to remain undisclosed. The subject matter of a trade secret may be
virtually any information that is valuable because it is not generally known. Trade secrets have enormous economic value. A study released in March of 2014 estimated
that trade secret misappropriation costs the world’s top 40 economies 1 to 3 percent
of their gross domestic product each year. Information protected by trade secrets is
often valuable because it is unknown and not readily ascertainable. What advantages and disadvantages come with
trade secret protection? Trade secret protection carries both advantages
and disadvantages. The decision to use trade secret law instead
of other kinds of protection depends on the nature of the intellectual property to be
protected. Unlike the 20-year time limit for the protection
of patents, there is no definite time limit placed on trade secret protection. This indefinite future protection is appealing,
if the intellectual property to be protected is likely to remain generally unknown well
into the future. Although there is no definite expiration of
trade secret protection, the protection has its limits; it only prohibits the disclosure
or use of the trade secret by one to whom the secret was disclosed in confidence. Unlike patent law, trade secret law does not
offer any affirmative protection against the use of the intellectual property if it is
independently derived or reverse engineered by a competitor. Consequently, if the intellectual property
to be protected is a new method of manufacturing a product, and if that method of manufacture
is ascertainable from an examination of the product, then the best form of protection
for the intellectual property is most likely patent protection. As the U.S. Supreme Court noted in Bonito
Boats v. Thunder Craft Boats, state trade secret law has never given the holder of a
trade secret protection against reverse engineering by the public or a competitor. The Supreme Court commented that in order
to receive protection from reverse engineering, the holder of the intellectual property must
seek the protection of federal patent law. In summary, some pros and cons of trade secret
protection are… Pros Trade secret law provides indefinite future
protection, so long as the trade secret stays a secret. Trade secret protection prevents the disclosure
or use of the trade secret by one to whom the secret was disclosed in confidence. Cons If someone comes up with the same idea on
their own, the trade secret is no longer protected by law. Trade secret law does not give the holder
of a trade secret protection from any reverse engineering. How is trade secret law different from copyright,
patent or trademark law? Unlike copyright and patent law, novelty and
tangibility requirements do not apply to trade secret protections. Additionally, patent and trademark law involve
an affirmative assertion of an intellectual property right, while trade secret law only
actively operates after a misappropriation or threatened misappropriation of the trade
secret has occurred. Unlike patents and copyrights that fall under
federal law, trade secret protection until very recently emanated from state law. What is the legal history of trade secret
law in the U.S.? The concept of trade secrets first appeared
in the American legal system in the case of Vickery v. Welch in 1837. The Massachusetts Supreme Court first explained
trade secret law in modern terms in Peabody v. Norfolk in 1868. Since the Peabody decision, the courts have
addressed trade secret issues many times. However, because each state may regulate trade
secret law independently, each state has developed its own legal regime to regulate and protect
trade secrets. To harmonize and standardize trade secret
law in the United States, the Uniform Law Commission published the Uniform Trade Secrets
Act, or UTSA, in 1979. The UTSA sought to create a uniform trade
secret law regime from state to state. However, the UTSA itself was not binding upon
states. For the UTSA to be successful, the states
needed to adopt and enact the model UTSA statute, with any modifications or customizations each
state legislature desired to make. Thus, each of the 48 states that adopted the
UTSA may have had a slightly different adaptation. But on May 11, 2016, the federal Defend Trade
Secrets Act (DTSA) was signed into law, thereby creating a federal cause of action for trade
secret misappropriation that largely mirrored the law formed under the Uniform Trade Secrets
Act (UTSA).

2 thoughts on “Lecture 34: Trade Secrets and Protection

  1. I have been sued for misappropriation of trade secrets for a decade and counting. I am a tax advisor that took a list of tax clients I serviced to my new enterprise. I had no non-compete or solicitation covenants, or any documentation that ever classified any list as secret from my former employer. My former employer even had me use my own email to correspond with clients, and email client lists to third parties with no NDA. I can access this list by proper means to this very day and was still found guilty. I plan on appealing. Litigation reform in this matter is desperately needed for former employees that want to start their own business. Help by signing my petition below.


  2. im in search of a patent agent or lawyer with an attitude of a pit bull or Rothwailer dispositionheat ;to pursue a case and get the spoils.

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