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The Case Against Federalizing Trade Secrecy

78 Pages Posted: 18 Feb 2014 Last revised: 10 Apr 2015

Christopher B. Seaman

Washington and Lee University School of Law

Date Written: January 16, 2015

Abstract

Trade secrecy is unique among the major intellectual property (IP) doctrines because it is governed primarily by state law. Recently, however, a number of influential actors — including legislators, academics, and organizations representing IP attorneys and owners — have proposed creating a private civil cause of action for trade secret misappropriation under federal law. Proponents assert that federalizing trade secrecy would provide numerous benefits, including substantive uniformity, the availability of a federal forum for misappropriation litigation, and the creation of a unified national regime governing IP rights.

This Article engages in the first systematic critique of the claim that federalizing trade secrecy is normatively desirable. Ultimately, it concludes that there are multiple reasons for trade secrecy to remain primarily the province of state law, including preservation of states’ ability to engage in limited experimentation regarding the scope of trade secret protection and federalization’s potential negative impact on the disclosure of patent-eligible inventions. Finally, it proposes an alternative approach — a modest expansion of federal courts’ jurisdiction over state law trade secret claims — that can help address the issue of trade secret theft without requiring outright federalization.

Keywords: trade secret, trade secrecy, misappropriation, federalization, common law, patent, disclosure, uniformity, legislation, intellectual property, IP, jurisdiction

JEL Classification: K10, K19, K29, K39, O30, O31, O34, O38

Suggested Citation

Seaman, Christopher B., The Case Against Federalizing Trade Secrecy (January 16, 2015). 101 Virginia Law Review 317 (2015); Washington & Lee Legal Studies Paper No. 2014-12. Available at SSRN: https://ssrn.com/abstract=2397567 or http://dx.doi.org/10.2139/ssrn.2397567

Christopher B. Seaman (Contact Author)

Washington and Lee University School of Law ( email )

Lexington, VA 24450
United States
540-458-8520 (Phone)

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