Similar Secrets

74 Pages Posted: 19 Dec 2018 Last revised: 7 Feb 2019

See all articles by Joseph Fishman

Joseph Fishman

Vanderbilt University - Law School

Deepa Varadarajan

Georgia State University - J. Mack Robinson College of Business; Georgia State University - College of Law

Date Written: December 3, 2018

Abstract

A foundational question in every dispute over intellectual property is whether the defendant’s product is too similar to the plaintiff’s. For almost all intellectual property regimes, an extensive body of case law and academic commentary has examined how such similarity should be measured. Trade secrecy, however, remains a remarkable exception. In trade secrecy cases, just as in other intellectual property cases, the defendant’s good or method can diverge markedly from what the plaintiff developed. Yet it turns out that trade secret case law provides little guidance for assessing how much similarity is too much. The standard remains, fittingly but frustratingly, a secret.

This Article takes the first close look at what that standard should be. We argue that trade secrecy’s similarity framework is currently asking an incomplete set of questions. It inquires almost exclusively into the defendant’s innovation process, instructing fact-finders to determine whether the defendant had acquired any advantage from familiarity with the secret. In doing so, it wrongly skips over an inquiry into the end product or method that the defendant is actually exploiting. A better test would consider not only the defendant’s benefit from knowing the secret, but also the kind of good that the benefit ultimately translates into. Under our proposal, claims for misappropriation through either improper acquisition or disclosure would remain largely the same. But misappropriation through use would change. A defendant wouldn’t be liable for using a lawfully acquired secret unless it is exploiting a good that incorporates material elements from the owner’s secret in a manner that the plaintiff actually foresaw or, given industry trends, could reasonably have foreseen.

Keywords: trade secrets, copyrights, patents

JEL Classification: O31, O34

Suggested Citation

Fishman, Joseph and Varadarajan, Deepa, Similar Secrets (December 3, 2018). University of Pennsylvania Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3295317

Joseph Fishman (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

Deepa Varadarajan

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

Georgia State University - College of Law ( email )

P.O. Box 4037
Atlanta, GA 30302-4037
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
44
Abstract Views
235
PlumX Metrics