Trade secrets have evolved from common law principles to a sophisticated legal framework. The 1868 case first recognized businesses' rights to protect confidential information, while later developments refined definitions and established key factors for determining status.
The , adopted by most states, harmonized laws across jurisdictions. It defines trade secrets and , provides remedies, and establishes a . This framework protects valuable business information and maintains fair competition in the marketplace.
Historical Development and Legal Framework of Trade Secrets Law
Historical development of trade secret law
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Top images from around the web for Historical development of trade secret law
Departing Employees, Confidentiality Clauses and European Trade Secret Protection | SpringerLink View original
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Industrial Psychology: Selecting and Evaluating Employees | Introduction to Psychology – Reinke View original
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Intellectual Property – Mastering Strategic Management – 1st Canadian Edition View original
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Early recognition of trade secrets in the United States
Initially protected under common law principles
First acknowledged in the 1868 case Peabody v. Norfolk which recognized a business's right to protect confidential information
(1939) provided a general definition of trade secrets
Established factors for determining the existence of a trade secret such as the extent of measures taken to guard and the value of the information to the business and competitors
(1995) updated the definition of trade secrets
Refined the factors for determining trade secret status to include the ease or difficulty with which the information could be properly acquired or duplicated by others
(1996) criminalized trade secret theft at the federal level
Applies to trade secrets related to products or services used in interstate or foreign commerce (pharmaceuticals, software)
Key provisions of Uniform Trade Secrets Act
Model law drafted by the Uniform Law Commission in 1979
Adopted by 48 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands which harmonized trade secret law across jurisdictions
Defines trade secrets and misappropriation
Trade secrets include formulas, patterns, compilations, programs, devices, methods, techniques, or processes that derive independent from not being generally known
Misappropriation involves the improper acquisition, use, or disclosure of trade secrets
Provides for to prevent actual or threatened misappropriation
Allows for damages including actual losses, unjust enrichment, and reasonable royalties
Establishes a 3-year statute of limitations for bringing trade secret claims
Allows for to maintain secrecy during litigation (sealing court records, restricting access to confidential information)
Concept of trade secret misappropriation
Acquisition of a trade secret through
Improper means include theft, bribery, misrepresentation, breach of a duty to maintain secrecy (employee NDA violation), or espionage (hacking, dumpster diving)
Use or disclosure of a trade secret without consent
By a person who acquired it improperly (industrial spy)
By a person who knew or had reason to know it was acquired improperly (company that hires employee with knowledge of competitor's trade secrets)
Legal implications of misappropriation
Injunctive relief prohibits further use or disclosure of misappropriated trade secrets
Damages compensate for actual losses (lost profits), unjust enrichment (disgorgement of profits from misappropriation), or reasonable royalties
up to double the amount of actual damages for willful and malicious misappropriation (intentional theft of trade secrets)
Attorney's fees awarded in cases of bad faith or willful and malicious misappropriation
Economic and Competitive Aspects of Trade Secrets
Trade secrets provide economic value by maintaining a company's in the market
can offer a over competitors
is an essential component of
Companies can maintain their market position through of similar innovations
The value of trade secrets lies in their ability to provide a unique commercial advantage that cannot be easily replicated