Open Borders, Intellectual Property Policy, and Federal Criminal Trade Secret Law

Abstract:     
The mobility of skilled labor across firms has been identified as an important source of regional advantage. Scholars have shown how cultural, economic, and legal conditions (such as the nonenforceability of covenants not to compete) affect the development of high tech sectors that are geographically concentrated. This paper explores to what extent these theories are applicable to the movement of skilled labor across national borders. This inquiry is relevant because the United States enacted the Economic Espionage Act in 1996, and this Act has been used to prosecute non-US skilled workers for theft of trade secret. The Act has application to mobility within the United States as well. To what extent are justifications for the Economic Espionage Act of 1996 mitigated by its effects on labor mobility and the accompanying transfer of knowledge and technology? This paper addresses this question through a theoretical discussion of international trade and mobility of labor and knowledge across borders and an assessment of the case law under the Economic Espionage Act. The author criticizes the Act because of its effect on the transfer of knowledge and makes the case for open borders to promote the mobility of knowledge. Several policy implications are drawn for limits on the Economic Espionage Act, including extraterritorial application of state trade secret law and federal patent law.

Keywords: Intellectual Property, Labor Mobility, International

JEL Classifications: F00,F01

Working Paper Series