From the halls of academia... Brian M. Hoffstadt, Dispossession, Intellectual Property, and the Sin of Theoretical Homogeneity, 80 S. Cal. L. Rev. 909 (2007)
In the last several decades, the legal academy has devoted a great deal of attention to developing a cogent definition of “property.” During this period, scholars have grappled with the related question of how intellectual property rights--namely, patents, copyrights, trademarks, and trade secrets fit within emergent property theories. By and large, the academy has concluded that intellectual property qualifies as “property” under all of the relevant analytical rubrics. ... D. Trade Secrets Trade secrets are unique among the categories of intellectual property because they derive their value not from being publicly disclosed as patented inventions, copyrighted works, and trademarks typically are, but from remaining undisclosed. Trade secrets encompass any knowledge--ranging from source code for computer software to industrial processes to the formula for Coca-Cola-- that has independent value because of its secrecy. Thus, a trade secret is no longer protected if the owner includes the secret in a patent application or in a copyright registration *928 application, or if a competitor is able to independently develop or reverse engineer the secret from the publicly sold end-product. Although the Supreme Court has recognized that a trade secret has constituted “property” since 1984, Congress took no action to confer generalized federal protection on trade secrets property until 1996. Even then, Congress enacted a very narrow statute, thereby leaving primary responsibility for protecting trade secrets with the states. [FN118] Most notably, Congress created a statute that made it a crime to knowingly possess, copy, deliver, or steal a trade secret (1) that is related to a product in interstate or foreign commerce, if done so to injure the owner and benefit someone else; or (2) intending or knowing that the offense will benefit any foreign government, agent, or instrumentality. Attendant to the authorization to pursue criminal prosecutions, Congress also empowered the Attorney General to seek civil remedies to enjoin violations that would otherwise constitute violations of the criminal provisions. Congress did not create a civil remedy available to aggrieved trade secret owners, thereby leaving federal enforcement of trade secret rights--and any opportunity to obtain restitution or fines -to the federal government.
Later in the article...
A trade secret is, in many respects, the temporal predecessor to a patented invention; it is a new innovation, invention or product, but one that the inventor has yet to present to the U.S. Patent and Trademark Office for a patent. The instrumental justifications for trade secret law are drawn against this backdrop. On the one hand, the policy that justifies patent protection--that is, the need to provide financial incentives to encourage inventors to invent items to use in the competitive marketplace and to discourage “free riders”--similarly animates the need for some sort of protection for trade secrets, which are also inventions of a sort. That is what has prompted legislative bodies to confer legal protection upon trade secrets in the first place. On the other hand, trade secrets are by definition “secret” and thus--unlike patented inventions--do not make any contribution to the collective knowledge of society. Thus, there is a corresponding policy to encourage the owners of trade secrets to ultimately seek a patent or copyright and therefore share their innovations. Consequently, legislatures have defined “trade secrets” narrowly, refusing to extend protection when another inventor independently makes the same creation or reverse engineers it from the publicly sold product incorporating the trade secret; patents, by contrast, protect against both circumstances. The secrecy of trade secrets has bred a collateral set of utilitarian considerations, namely, the function of trade secrets protection as a means of ensuring rules of fair competition in the marketplace while not stifling employee mobility that might suffer if employee movement invariably resulted in litigation over whether the employee's previously acquired knowledge constituted a “trade secret.” In the end, trade secret law reflects a compromise between fostering incentives to create with the competing desire to encourage disclosure and to ensure mobility of employees in the marketplace.To read the full text check your law library, Lexis, Westlaw or USC when added.
