The Behavioral Foundations of Trade Secrets: Tangibility, Authorship and Legality

Journal of Empirical Legal Studies, 3(2) 197-236 (2006).

Bar Ilan Univ. Pub Law Working Paper No. 1-05

81 Pages Posted: 7 Jul 2004 Last revised: 22 Dec 2013

Yuval Feldman

Bar-Ilan University - Faculty of Law

Date Written: July 6, 2004

Abstract

This paper examines whether the nature of information protected by trade-secrets law impacts departing employees' normative judgments of obedience to trade-secrets law. This examination is based on a comparison of three manipulated hypothetical scenarios: when the employee memorizes the confidential information, when the employee develops the confidential information herself and when the employee downloads the confidential information to her personal computer. The empirical analysis is based on data collected from a non-random multi-sourced sample of 260 high tech employees in Silicon Valley. These experimental manipulations enable me to examine and compare the contributions of tangibility and authorship to employees' normative evaluations of the sharing of confidential information/trade secrets. I conclude that while tangibility was a far stronger factor in employees' normative evaluations of trade secrets, authorship was strongly related to the morality of trade-secrets disclosure. In addition, based on a path-analysis approach, I examine and compare the ways in which social costs, legal costs, morality and perceived psychological contract contribute to the effects of tangibility and authorship on employees' normative evaluations of the sharing of confidential information/trade secrets. When attempting to explain the effect of tangibility, the expected social approval of the new firm proved to be the most important factor. I conclude with an examination of the behavioral importance of several legal paradigms to Silicon Valley high tech employees' views of trade secrets - general paradigms such as loyalty and ownership are considered in addition to more particular paradigms such as the "labour theory" and the memory rule.

Keywords: Intellectual property, trade secrets, social norms

JEL Classification: K42

Suggested Citation

Feldman, Yuval, The Behavioral Foundations of Trade Secrets: Tangibility, Authorship and Legality (July 6, 2004). Journal of Empirical Legal Studies, 3(2) 197-236 (2006).; Bar Ilan Univ. Pub Law Working Paper No. 1-05. Available at SSRN: https://ssrn.com/abstract=562233 or http://dx.doi.org/10.2139/ssrn.562233

Yuval Feldman (Contact Author)

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900
Israel

Paper statistics

Downloads
264
Rank
94,248
Abstract Views
2,769