The Evolution of Trade Secret Law and Why Courts Commit Error When They Do Not Follow the Uniform Trade Secrets Act
Hamline Law Review, Vol. 33, p. 493, 2010
51 Pages Posted: 13 May 2011
Date Written: Summer 2010
In the spring of 2010, the Hamline Law Review hosted a symposium to mark the thirtieth anniversary of the adoption of the Uniform Trade Secrets Act. This article was written for the symposium and provides an exhaustive and detailed account of the historical context and drafting history of the Uniform Trade Secrets Act (the UTSA).
Among other stories that it tells, the article explains that the UTSA was prompted by the “Erie/Sears/Compco squeeze.” Because of the Supreme Court’s famous decision in Erie R.R. Co. v. Tompkins in 1938, it was understood by business interests and their attorneys that the common law development of unfair competition law would have to occur at the state level. However, when the Supreme Court rendered its decisions in the Sears/Compco cases in 1964, the development of unfair competition law at the state level came to a screeching halt. This led to various efforts to fill-the-gap, including a number of proposals for a federal unfair competition law that, in some iterations, included a prohibition on trade secret misappropriation.
As detailed in the article, another impetus behind the development of the UTSA was the business community’s dissatisfaction with the pace of development and features of the common law of trade secrecy. Importantly, concern was expressed about the risks that trade secret rights would be over-asserted in ways that would unduly quell competition. Thus, care was taken to define trade secrets and available injunctive relief in ways that limit the scope of trade secret protection. In this regard, the drafters of the UTSA were guided by the Supreme Court's decision in Kewanee Oil Co. v. Bicron Corp. which counsels against broad trade secret protection.
Keywords: Trade Secret, Unfair Competition, Sears, Compco, Kewanee, Federal Preemption, Uniform Trade Secrets Act, UTSA, Unfair Trade Practices, Intellectual Property, Uniform Law, Legal History, Erie, Restatement First of Torts
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