Introduction to Intellectual Property Outline

Osborn Intro to IP Spring 2017
Trade Secret
Rationales
Tort
Commercial morality, wrongful action, unfair competition
Often, but not always breach of contract
Also includes espionage
Property
Give protection as an incentive to innovate
Authority
Four Important Authorities
Uniform Trade Secrets Act
Most states, but not NY, NC, MA
!!!!!
Defend Trade Secrets Act
Federal Law; coexists with state law
New as of 2016
RST of torts §§757 & 758
Factors
Extent to which information is known outside the business
The extent to which it is known to employees and others involved in the business
The extent of measures taken to guard secrecy of the information
Value of the information to the business and its competitors
The amount of effort or money expended in developing the information
The ease or difficulty with which the information could properly be acquired or duplicated by others
RST (third) of Unfair Competition
Litigating Trade Secrets
3 Criteria
Eligible Subject Matter
Efforts to Maintain Secrecy (can be combined with first element)
Misappropriation
Eligible Subject Matter
General
Categories of information eligible
Categories are broad
Customer lists
Pricing lists
Buffets, Inc.
π could not claim its relatively straightforward recipes for barbecued chicken and macaroni and cheese as trade secret
Camp Creek Hospitality Inns
A hotel could protect information about its prices, discounts, and occupancy levels as a trade secret where it was closely guarded information in the industry.
Nextdoor.com, Inc.
Decision to test a new neighborhood-oriented social network in a particular neighborhood could be a trade secret where the plaintiff did substantial investigation before deciding on that neighborhood.
Metallurgic
Uniform Trade Secret Act
Trade Secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
derives independent economic value, actual or potential, from
not being generally known to, and
not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, AND
is the subject of efforts that are reasonable under the circumstances to maintain its secrecy
RST Torts Factors
The extent to which information is known outside the business
The extent to which it is known to employees and others involved in the business
The extent of measures taken to guard secrecy of the information
The value of information to business and its competitors
The amount of effort or money expended in developing the information; and
The case or difficulty with which the information could properly be acquired or duplicated by others
Reasonable Efforts to Maintain Secrecy
Disclosure
When does disclosure ruin secrecy?
Voluntary public disclosure destroys secret
E.g., patent, journal, etc.
If a product is widely sold and can be (but has not yet been) reverse-engineered, can it be a trade secret?
Maybe. If it is “readily ascertainable”, then no secret.
 Third party disclosure?
if it is widely disseminated, disclosure usually destroys trade secret, even if they stole it.
But some courts bend the rules here (see some internet disclosure cases)
Accidental disclosure by owner?
If gets widely disseminated, secret is lost
Will contractual restrictions against reverse engineering work?
Maybe
Can you have a trade secret in object code that everyone can see (even if they don’t know what it means)?
It seems copyright should protect object code, if anything will
Rockwell
Misappropriation
Uniform Trade Secrets Act
(2) “Misappropriation” means:
acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(ii) disclosure OR use of a trade secret of another (without express or implied consent) by a person who
(A) used improper means to acquire knowledge of the trade secret; or
(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was
(I) derived from or through a person who has utilized improper means to acquire it;
(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use;
(C) before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
Improper Means
Federal law defines improper means:
Includes
theft, bribery, misrepresentation,
breach or inducement of breach of duty to maintain secrecy, or
espionage through electronic or other means; and
Does not include reverse engineering, independent derivation, or any other lawful means
(UTSA does not include the underlined portion, but case law generally follows it)
DuPont
Confidential Relationship
General
Best way to establish a confidential relationship is through express contract
Courts can imply confidentiality obligations
Smith v. Dravo
RST of unfair competition §41 holds that a confidential relationship is established in the following circumstances:
(a) the person made an express promise of confidentiality prior to the discl