The Economic Structure of Trade Secret Law lawreview - Minnesota Law Review
By TUN-JEN CHIANG. Full Text. The standard economic account of trade secret law focuses on providing incentives for creating new inventions. The incentive-to-invent theory, however, provides little explanation for why the key doctrinal features of trade secret law are structured the way that they are. For example, providing ex ante incentives to invent does not lawreview - Minnesota Law Review
The standard economic account of trade secret law focuses on providing incentives for creating new inventions. The incentive-to-invent theory, however, provides little explanation for why the key doctrinal features of trade secret law are structured the way that they are. For example, providing ex ante incentives to invent does not easily explain the requirement that an inventor must take measures to preserve secrecy even after the invention has been created. Nor does it explain why trade secret misappropriation, unlike patent and copyright infringement, requires “improper” conduct by the defendant for liability.
This Article gives a different theory of trade secret law. The primary economic purpose of trade secret law is not to preserve the incentive to invent but to dissuade the possessor of a secret idea from using inefficient self-help countermeasures to protect the secret. As the Article will explain, this anti-countermeasure principle provides an overarching theory to explain the key structural features of trade secret law in a manner that the incentive-to-invent theory does not.
Executive Summary
This article challenges the conventional economic account of trade secret law, which focuses on providing incentives for creating new inventions. Instead, it proposes an alternative theory, the anti-countermeasure principle, which suggests that the primary economic purpose of trade secret law is to dissuade the possessor of a secret idea from using inefficient self-help countermeasures to protect the secret. This theory provides a more comprehensive explanation for the key structural features of trade secret law, including the requirement of secrecy measures and the need for improper conduct by the defendant for liability.
Key Points
- ▸ The conventional incentive-to-invent theory of trade secret law is insufficient to explain key doctrinal features
- ▸ The anti-countermeasure principle provides an alternative economic purpose for trade secret law
- ▸ This principle explains the requirement of secrecy measures and the need for improper conduct by the defendant for liability
Merits
Comprehensive Explanation
The anti-countermeasure principle provides a more comprehensive explanation for the key structural features of trade secret law, addressing the limitations of the conventional incentive-to-invent theory.
Demerits
Limited Empirical Support
The article's alternative theory may lack empirical support, which could limit its applicability and persuasiveness in practice.
Expert Commentary
The article's proposal of an alternative theory of trade secret law is a significant contribution to the field of intellectual property law. By highlighting the limitations of the conventional incentive-to-invent theory, the authors demonstrate a nuanced understanding of the complex economic and legal factors at play. The anti-countermeasure principle has the potential to inform more effective trade secret protection strategies and influence policy debates on the optimal design of trade secret law. However, further empirical research is needed to fully test the validity and applicability of this alternative theory.
Recommendations
- ✓ Further empirical research should be conducted to test the validity and applicability of the anti-countermeasure principle
- ✓ Policymakers and practitioners should consider the implications of the anti-countermeasure principle for the development of more effective trade secret protection strategies
