Against Intellectual Property by N. Stephan Kinsella

Author:N. Stephan Kinsella [Kinsella, N Stephan]
Language: eng
Format: epub, mobi
Publisher: Ludwig von Mises Institute
Published: 2010-03-26T16:00:00+00:00

Trade Secrets

Trade secrets are easier to justify than patent or copyright. Palmer argues that they “emerge” from common law-type rights, and are, thus, legitimate.90 Trade secret law allows damages to be obtained for, or an injunction to be issued to prevent, acts of “misappropriation” of a trade secret. This can be applied against the person who has improperly acquired the trade secret or who divulges the secret contrary to a contractual obligation, and also against others who know that they are obtaining the secret from such a person.91

Suppose employee A of company X has access to X’s trade secrets, such as its secret formula for a soft drink. He is subject to an employment agreement obligating him to keep this formula secret. He then jumps to X’s competitor, Y. Y wants to use the formula it learns from A to compete with X. Under current law, so long as the secret formula has not been made public, X can get a court order to stop A from revealing the secret to Y. If A has already revealed the secret to Y, X can also get an injunction to stop Y from using or publicizing the formula.

Clearly, the injunction and damages against A are proper because A is in violation of his contract with X. More questionable is the injunction against Y, because Y had no contract with X. In the context in which such situations usually arise, however, where the competitor Y wants the trade secret and knows the defecting employee is in breach of contract, it could be argued that the competitor Y is acting in conspiracy with or as an accomplice of employee A to violate the (contractual) rights of trade secret holder X. This is because A has not actually breached his trade secrecy agreement until he reveals trade secrets to Y. If Y actively solicits A to do this, then Y is an accomplice or co-conspirator in the violation of X’s rights. Thus, just as the driver of the getaway car in a bank robbery, or the mafia boss who orders an assassination, are properly held liable for acts of aggression committed by others with whom they conspire, third parties can, in narrowly defined cases, be prevented from using a trade secret obtained from the trade secret thief.92

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.