What Can the Uniform Trade Secrets Act Learn from the Bayh-Dole Act
Hamline Law Review, Vol. 33
33 Pages Posted: 22 Mar 2010 Last revised: 4 Mar 2014
Date Written: February 17, 2011
The Bayh-Dole Act (“Bayh-Dole”), enacted in 1980, one year after the initial adoption of the Uniform Trade Secrets Act (“UTSA”), is a federal law designed to “use the patent system to promote the utilization of inventions arising from federally supported research or development” and “to promote collaboration between commercial concerns and non-profit organizations, including universities.” Bayh-Dole’s purpose is to encourage non-profits and academic institutions to commercialize their discoveries and innovations so that the marketplace and consumers can more quickly benefit from scientific and other advances. Bayh-Dole primarily encourages commercialization of innovation by allowing institutions to patent and own their publicly funded research and development. As a result, Bayh-Dole has had a profound impact on universities.
Key to Bayh-Dole’s success in stimulating innovation is the implicit absence of trade secrecy protection for federally funded research. Trade secrecy is not permitted by Bayh-Dole because of a belief that the patent system better serves the advancement of common knowledge, which should be the primary goal of federally funded research and development. The absence of trade secrecy in the Bayh-Dole framework illustrates the recognition of a basic fact that seems to have been ignored, forgotten, and/or misunderstood in the drafting and implementation of the UTSA: there are specific scenarios in which trade secrecy does not belong. While there are arguments in favor of a trade secrecy option under Bayh-Dole, the underlying policy rationales for its absence - primarily, trade secrecy’s focus on keeping secrets - reflect a proper understanding of the strengths and limitations of the doctrine.
Bayh-Dole reflects a rare but commendable instance where utilizing trade secrecy as part of a package of innovation incentives was effectively declined because its application does not mesh with the overarching policies and practical goals that are sought. For example, in the case of Bayh-Dole, despite the potential benefits of trade secrecy, public disclosure and dissemination of publicly funded research was deemed more important. While first considering the costs and benefits of trade secret law may seem like a basic step when considering its application to areas of public interest or government activity, there are several areas where, with little or no policy analysis, trade secrecy has intruded despite its arguably inappropriate fit. Among those scenarios are public-private partnerships, government operations, public infrastructure projects, criminal prosecutions, and public health and safety matters. In these situations, the purpose and impact of trade secrecy was largely ignored by policymakers and courts, often resulting in unanticipated, unintended and arguably unwanted outcomes, such as keeping vital information from the public to drive up consumer costs.
The UTSA should take heed of Bayh-Dole’s unwillingness to utilize trade secrecy in a situation where there is a strong need for public disclosure and be inspired to consider following its lead in the situations outlined in this article. Like the Copyright Act and trademark’s Lanham Act, the drafters of the UTSA, the Uniform Law Commission of The National Conference of Commissioners on Uniform State Laws (“ULC”), should consider creating exemptions to trade secret coverage in the situations discussed below, and/or limiting the remedies available for disclosure of a trade secret when a public interest in the information exists. Indeed, in the situations discussed herein, from the operation of voting machines to activities conducted at state universities, the primary effect of trade secrecy - preventing disclosure of information and keeping information secret - is in conflict with underlying policies, like transparency and accountability, and desired outcomes. The ULC could preempt the application of trade secret law in such areas where it may not belong and end the intrusion of trade secrecy into scenarios where its application both leads to outcomes contrary to the public interest and weakens trade secrecy as a theoretically consistent and sound doctrine.
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