We have written recently about the ongoing effort in Congress to create a federal civil remedy for trade secret misappropriation. Last week, James Nurton, the Managing Editor of Managing IP, wrote a story with the heading: “Trade Secrets Get Sexy.” Mr. Nurton discusses how efforts to harmonize, and elevate the importance of, trade secret laws are happening not only in the United States, but around the globe – from China to the European Union – and in the multilateral trade agreements that the United States is currently negotiating.
Trade secret laws are an increasingly important form of protection for companies’ most valuable know-how. Trade secrets are particularly useful as a means to maintain a competitive edge built on years of research and development. Their rise in importance has been augmented by evolving standards for patentability and the increased difficulty of obtaining equitable relief for patent infringement. By keeping differentiating intellectual property as trade secrets, companies can keep the know-how from being used by competitors.
It is perhaps counter-intuitive that strong trade secret protection laws also facilitate the sharing of information. A business that is assured its intellectual property will be protected is likely more willing to share it with joint venture partners and others engaged in research and development. This type of assurance requires both the use of best practices to safeguard valuable know-how and a consistent, predictable legal system to back it up.
This brings us to an important concluding remark in Mr. Nurton’s blog. He notes that while legislation creating a federal civil remedy in the United States and a harmonized system in the E.U. are important for trade secret owners, legislation does not replace the need for strong, effective preventative measures at the outset.
We agree. In fact, the Senate and House Judiciary Committees have both heard testimony this year that addresses this very issue: that is, trade secret protection requires a dual strategy involving both the private and public sectors. Trade secret owners must deploy effective measures proactively to safeguard their property. But even the use of the best practices a company can adopt will not keep all trade secrets completely immune from theft, and it is therefore crucial that governments provide effective remedies for when trade secrets are stolen despite protective measures.
The legislation currently being considered in Congress would establish that necessary remedy in the United States and would serve as a model around the world. If Mr. Nurton is correct that trade secrets are indeed getting sexy, in the United States that is likely a result of the good work being done on a bipartisan, bicameral basis in Congress and the Administration on this subject.