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Intellectual Property
Villanova University School of Law
Carrier, Michael A.

INTRODUCTION
·         Four Areas of IP Law
o       Trade Secret
o       Copyright
o       Patent
o       Trademark
·         Quick Economics Stuff
o       Perfect competition drives the price down to the marginal costs, creating an incentive to be efficient for a producer
o       IP is an exception to our general preference for perfectly competitive markets
§         Balance: How many comparative advantages are we willing to tolerate for the public to eventually reap the benefits of the new technology/creation?
·         IP Set-Up
o       Subject matter
o       Scope of rights
o       Duration
·         Two Schools of Thought Behind IP Laws
o       Innovation Policy
§         Creating incentives to create/invent without fear of the innovations being instantly copied, losing the comparative advantage and not recouping the innovation costs
o       Commercial Morality
§         More like tort law, where we want business to act with good faith towards each other
TRADE SECRETS
·         Basics
o       Subject Matter
§         Information that derives economic value from not being generally known (or knowable) by the public or the competition
§         Subject to reasonable efforts to keep it secret
o       Scope of Rights
§         Basically a tort action against someone who misappropriates that information
§         Right to keep the comparative advantage from your trade secret
o       Duration
§         Lasts in perpetuity until it is no longer a secret
·         Elements of a Trade Secret Claim
o       Information has an independent economic value from being generally unknown and is not readily ascertained;
o       Information has been subject to reasonable security; AND
o       Defendant misappropriated the information
·         Reasonable Security Requirement
o       Incredibly fact-based inquiry
o       What is the evidence of security measures? Does everything have to be marked “TOP SECRET”?
§         Confidentiality/Non-disclosure agreements with employees and contractors
ú         When in the course of dealing with another party it is necessary to divulge the secret, confidentiality agreements are very important to prove you took reasonable security measures
ú         Confidential relationships may arise by express contract or by implication
§         Restricted access
ú         Physical security and limiting the number of people who are involved in the secret is a good sign of reasonable security
o       Why have this requirement?
§         Subjective belief that the secret is valuable can be used as proof that the secret actually is valuable
§         Theoretically we would assume that a reasonable company would incur costs to protect what they see as a valuable company and conversely not spend anything to protect what they do not consider a secret or valuable
ú         Ex: Dairy farm wouldn’t try to hide cows, since that is not information that is a secret. Milk = cows, no need to hide them from competition
§         Limit the chance of a windfall to a company that didn’t spend any $$ on security only to sue later for misappropriation and get a profit
o       Disclosure
§         Axiomatic that if the Secret has been Disclosed – NO LONGER SECRET
§         Methods of disclosure:
ú         Owner may publish
ú         Owner may disclose secret by selling a commercial product that embodies the secret
ú         Public disclosure through publication or sale of a product
ú         Inadvertent disclosure (blue

TY RIGHT
§         Is there a trade secret in the first place?
ú         Goes back to subject matter requirements
o       Reverse Engineering – 2 Options
§         Not a secret, because it was readily ascertainable based on the ease of the reverse engineering
§         A secret, because the reverse engineering was difficult, but no misappropriation because reverse engineering is a proper means of acquiring information
·         Issues with Departing Employees
o       Most common source of trade secret issues
o       Best combated with express non-compete contracts, but usually doesn’t work out that smoothly
§         Majority of courts view non-competes under a reasonableness standard
·         Remedies
o       Plaintiff is almost always looking for an injunction
§         Injunction Requirements
ú         Irreparable harm to the plaintiff
ú         Grant will not cause irreparable harm to the defendant
ú         The harm caused by the misappropriation will continue occurring absent an injunction
ú         The public interest will not be harmed by the issue of injunction
§         If all these are fulfilled, then the question becomes the scope of the injunction
§         “Head-start” injunction
ú         Expands the monopoly period for a definite amount of time, equal to a judicial idea of how long it would have taken a competitor to discover the secret by proper means