FALL 2010

Trade Secrets


Course No. 9200-704 (& 804)-801

ID No. 85737 & 85736

Time:  W 6:30 - 9:30 p.m.
Room:  W-215
Professor Jay Dratler, Jr.
Room Across from 231D (IP Alcove)
Home: 330-835-4537
Copyright © 2000, 2002, 2003, 2006, 2008, 2010   Jay Dratler, Jr.   For permission, see CMI.

Questions and Notes on Plant Industries and Innovative Construction Systems

1.  In both of these cases, the court finds a trade secret despite secrecy precautions that are far less than airtight.  Are these courts just being lenient, are they influenced by malodorous facts, or is there method in their madness?

2. Both courts (really, the jury in Innovative) seem to looks at the probability of the secret actually getting out due to lax security, and both courts find that probability small.  Is that an appropriate standard for determining whether efforts to keep a secret are reasonable?  Does it matter whether the probability of the secret getting out is higher or lower if it did not in fact get out and still has economic value by virtue of its limited availability?

3.  How can courts (or juries, for that matter) determine reliably whether efforts to keep a secret are reasonable without a standard for determining what is reasonable?  What should that standard be?

Does it matter whether you view trade-secret law as providing property rights or simply as providing protection against improper means?  Does assessing the probability of the secret leaking make more sense if you think of a trade secret as a piece or property?  Could you then think of that probability as measuring the "strength" or value of the property?

But what if you think of trade secrets as nothing more than protection against bad behavior?  What is the appropriate standard then for determining whether efforts to keep the secret have been reasonable?  Might it have something to do with putting people on notice of the claim of secrecy, so that the law does not penalize what looks like bad behavior but is actually inadvertent or innocent?  In other words, might it have something to do with no "sandbagging" defendants with trade-secret claims that no reasonable person could anticipate based on the facts?

4. If you take the latter approach to trade-secret protection, do the rationales and/or the results in these two cases make sense, despite the less-then-airtight security?  Do any facts in these cases suggest that the defendants in these cases, and perhaps other similarly situated were or should have been on notice that the processes issue were secret and not to be used without an agreement on trasnsfer or compensation?  If so, what facts?

5.  Unlike the Uniform Trade Secrets Act, whose definition of "trade secret" explicitly requires reasonable efforts to guard it, the ALI's Restatement (Third) of Unfair Competition (1995) downplays reasonable efforts and focuses on other indicia of trade secrecy.  Was the Restatement right to take this tack?  Is the "reasonable effort" requirement just an unimportant technicality that allows courts to manipulate analysis to get the results they want?  Or does the criterion add some substance to the definition and address some good policies?  If so, what are those policies?

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