Use at Common Law and Under the Uniform Trade Secrets Act
- Author(s): Eric Claeys
- Date Posted: July 2010
- Law & Economics #: 10-34
- Availability: Full text (most recent) on SSRN
This Essay was prepared for a symposium on the Uniform Trade Secrets Act hosted at Hamline University School of Law. At common law, a party may not claim that an intellectual work is a trade secret without proving that the secret is continuously used to augment the competitive advantage of his business products. The Act dispenses with this requirement: An intellectual work counts as a trade secret whether or not it is actually used in competition as long as it has “potential” economic value.
Common law made more sense than the Act’s drafters appreciated. Trade secrecy makes considerable sense as an application of usufructuary property principles to the realms of innovation and information-gathering. If a party wants the benefit of an intellectual property usufruct, it must deploy its intellectual work actively and productively. This Essay illustrates with three doctrines: the treatment of precommercial use, negative know-how, and situations in which a claimant arguably abandons a secret by discontinuing its use.