1-2 POLICY BACKGROUND ON TRADE SECRET CLAIMS

• Jurisdiction: United States

1-2 Policy Background on Trade Secret Claims

Unlike with patent or copyright law, the protection of trade secrets does not arise from the positive policy aim of encouraging or rewarding innovation. Trade secret law serves a slightly darker purpose—to guard against unfair competition. In the 1970s, the U.S. Supreme Court discussed the policy underlying trade secret protection, identifying its conceptual roots as "the maintenance of standards of commercial ethics."¹ A recent Texas federal court case put it this way: "[Trade secret law's] protection is not based on a policy of rewarding or otherwise encouraging the development of secret processes or devices. The protection is merely against the breach of faith and reprehensible means of learning another's secret."² Along these lines, one commentator has identified an even more fundamental shift in recent trade secret decisions, away from a focus on the individual's misuse of the trade secret and instead adopting a policy lens of protecting against unfair or unethical business competition.³ With this foundation, it is no wonder that courts and commentators alike have broadly warned that the types of protected information or behavior eschew easy categorization because a complete catalogue of "unethical" business activities is simply impossible to create.⁴

Because the underlying policy of trade secret law is to guard against unfair competition, it is both broader and narrower than other intellectual property doctrines. As the U.S. Constitution envisions, both patent and copyright laws grant the intellectual property owner a monopoly of a limited number of years in exchange for public disclosure in order to promote scientific and artistic progress. By contrast, trade secret protection has no time limits so long as the information remains a secret. Trade secrets also need not be novel or original to deserve protection—although novel or original information is not disqualified as a trade secret just because it might also merit protection as some other form of intellectual property. Also, unlike patent or copyright law, merely copying a trade secret does not, in itself, give...