Trade Secrecy Injunctions, Disclosure Risks, and eBay's Influence

56 American Business Law Journal (2019 Forthcoming)

32 Pages Posted: 13 Nov 2019

See all articles by Deepa Varadarajan

Deepa Varadarajan

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

Date Written: October 1, 2019

Abstract

Historically, intellectual property (IP) owners could rely on injunctive remedies to prevent continued infringement. The Supreme Court’s eBay v. MercExchange decision changed this, however. After eBay, patent courts no longer apply presumptions that push the deliberative scales in favor of injunctions (or “property rule” protection). Instead, patent injunctions require a careful four-factojavascript:void(0);r analysis, where plaintiffs must demonstrate irreparable injury (i.e., that money damages cannot compensate). The eBay decision has made it harder for patent plaintiffs to secure injunctions, and has led many district courts to consider innovation policy concerns (e.g., the strategic behavior of patent “troll” plaintiffs) in the injunction calculus. By and large, courts’ more deliberative approach to patent injunctions post-eBay has been viewed as beneficial for the patent system.

Over the past decade, eBay’s influence has migrated to other areas of IP. This Article analyzes eBay’s impact on federal trade secrecy injunctions. Important differences between trade secret law and other areas of IP — for example, the hard-to-quantify risk that disclosure poses to trade secret owners — has lessened eBay’s influence on trade secrecy injunctions. This Article argues that disclosure risks likely justify a bifurcated approach to trade secrecy injunctions. That is, in cases involving the dissemination of trade secrets, courts should presume irreparable harm. However, in cases involving only the unauthorized use of a trade secret — i.e., where a defendant builds upon a plaintiff’s trade secret — courts should apply the eBay framework. As part of this assessment, courts should consider policy concerns related to cumulative innovation and employee mobility.

Keywords: trade secrets, intellectual property, remedies

Suggested Citation

Varadarajan, Deepa, Trade Secrecy Injunctions, Disclosure Risks, and eBay's Influence (October 1, 2019). 56 American Business Law Journal (2019 Forthcoming). Available at SSRN: https://ssrn.com/abstract=3480704

Deepa Varadarajan (Contact Author)

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

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