Introduction.

• Author: Risch, Michael
• Position: WHY DO WE HAVE TRADE SECRETS?

Why do we have trade secrets? This was the fifty billion (1) dollar question I was asking myself in a trade secrets trial as the judge asked, "I assume that you'll have evidence of irreparable injury to obtain an injunction if the jury finds trade secret misappropriation?" (2) I must admit that I was surprised by the question. After all, what good are trade secrets if the owner cannot easily stop someone from using them? If someone steals source code, then an injunction issues as a matter of course, does it not? (3) Why should trade secrets not be treated like any other property? The answers to these questions are unclear, and, in general, case law simply does not provide a compelling answer to the question of why we should have trade secrets and whether or not trade secrets should be entitled to the same treatment as other forms of real, personal, and intellectual property.

Trade secrets are curious anomalies in intellectual property law. They are arguably the most important and most litigated form of intellectual property, (4) yet they have recently been called "parasitic" (5) and the leading economic analysis claims that "there is no law of trade secrets." (6) The basis for these claims is that trade secret misappropriation relies for the most part on wrongdoing that is independent of any "trade secret law," relying instead, for example, on a breach of contract or trespass claim.

"Why," the detractors ask, "do we need separate trade secret laws when common law principles will suffice?" In a well considered and clearly written analysis, Professor Robert Bone concludes that, on the whole, trade secrets lack normative justification and should be pared back. (7) Professor Bone's article has been cited in more than sixty journal articles since it was written in 1998, and only two authors have since challenged it by attempting to provide a normative justification for trade secret laws. (8) Even authors claiming to justify trade secrets assert that "United States trade secret law is in a state of disarray." (9)

This Article examines four potential ways to justify trade secret law. First, it considers property rights and proposes a different way to look at whether trade secrets are property. It concludes that further examination of the underlying bundle of rights is necessary for normative justification.

It then provides and responds to criticism of three other independent normative justifications for trade secret law's bundle of rights...