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Unformatted text preview: Trade Secrets: Three Important Parts: 1) Secret- Doesnt need to be completely secret - Just relatively secret - Think Skull and Bones 2) Trade - Has to be used in trade- Not your personal diary- Think McDonalds special sauce 3) Advantage or potential for advantage- Losing money advantage- A trade secret that is defective/doesnt work advantage- Think weight loss formula that makes people gain weight Use: 1. For torts you need breach of duty 2. Misappropriation of trade secret = tort 3. For misappropriation of trade secret you need a breach of duty. 4. Question: What is the breach of duty? 5. Answer: Wrongful misappropriation occurs if one discloses or uses anothers trade secret without a privilege to do so. Definition Privilege: Privilege can be conferred by the owners consent: 1. Can give competitors a license (implied or actual); 2. Employees can use it in the scope of employment; Privilege can be conferred by the owners carelessness Privilege can be OBVIATED (means to anticipate and prevent or eliminate) Without Privilege Improper conduct is the key to liability You cant spy You cant hire a spy You cant acquire under false pretenses You cant break faith (i.e., a confidentiality agreement) You cant break faith, even if the secret could have been easily discovered independently . With Privilege Permission confers privilege Implied permission confers privilege But you do not always need permission to get privilege W/o privilege w/o permission You can use a trade secret without the owners permission, but still with privilege . This happens when you are either very clever or the owner is very careless or the secret is no longer secret. How to lose a trade secret: Competitors Cleverness Independent discovery Reverse engineering of product on the market Owners Carelessness Unrestricted disclosure to persons not under obligation of secrecy Obviation The secret is no longer secret However they are a gamble that can last forever Once a competitor gets a hold of trade secret with privilege but not under a confidentiality agreement, the owner is in a bad place. Once the secret is not secret, there is no protection! You cannot patent something that had previously been protected by a trade secret. Trade Secret v. Patents Trade secrets, legally, can last forever, but dont have to. Whether or not they will depends on many factors Remedies: In other words, the court forces the defendant to put the plaintiff back in the position she would have been in had the misappropriation not occurred. That is, the remedy is the same for any other tort!...
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This note was uploaded on 05/05/2008 for the course CPSC 180 taught by Professor Robertdunne during the Spring '06 term at Yale.
- Spring '06