Product of R&D. Significant component of a balanced IP portfolio. Economic driver. In homage to Jeopardy!®, “What are trade secrets?” Right!
“Trade secrets” is also the answer to the following question: what type of IP is currently garnering significant attention from both U.S. and European legislators? More specifically, U.S. and European legislative bodies are proposing significant, pro-trade secret changes to their respective laws.
On November 22, 2013, Senator Flake (R-AZ) introduced S. 1770, the Future of American Innovation and Research Act of 2013 (a.k.a., the FAIR Act). The FAIR Act seeks to create a federal, statutory, civil cause of action for trade secret misappropriation against a person who misappropriates a trade secret (a) while located outside the United States or (b) on behalf of, or for the benefit of, a person located outside the United States. The FAIR Act further provides that conduct outside the United States can support a cause of action if that conduct, alone or in combination with conduct in the United States, “causes or is reasonably anticipated to cause an injury” within the United States or to a United States person. While the FAIR Act probably needs to be amended in certain respects, that bill properly reflects the value of trade secrets, the importance of access to federal courts, global marketplace realities and global/foreign threats to trade secrets.
The U.S. Senate also is expected to consider another trade secret bill in the near future. That bill, the Protecting American Trade Secrets and Innovation Act of 2013 (PATSIA), seeks to create a federal, statutory, civil cause of action for trade secret misappropriation, but without expressly addressing persons or conduct outside the United States. Like the FAIR Act, PATSIA probably needs to be amended in certain respects. Nevertheless, PATSIA properly reflects the value of trade secrets and the importance of access to federal courts.
On November 28, 2013, the European Commission issued a directive to harmonize trade secret laws among the European Union’s (EU) member states. More specifically, that directive proposes rules to facilitate transnational protection and enforcement of trade secrets. The directive, which may be adopted under the EU’s legislative procedure, properly reflects the value of trade secrets, global marketplace realities and global/foreign threats to trade secrets.
In short, companies should assess their IP portfolios and ask: are trade secrets properly accounted for and protected? Consistent with recent activity by U.S. and European legislators, there is too much at stake not to do so.