6 - The New Rule for Keeping Secrets – The Economic Espionage Act

Summary

although the dominance of technological developments has made trade secrets more valuable, warranting greater protection, the rise of globalization has made them harder to protect. Intellectual property – inventions and innovations in products and processes – has been the engine driving economic growth. Because controlling the use of inventions, innovations, and other business-enriching information is essential to competitive success, trade secrets have become increasingly valuable.

At the same time, globalization of the economic system has increased worldwide demand for these inventions and innovations. As demonstrated earlier, globalization, the decline in customer and employee loyalty, the availability of venture capital, and improved information flow all makes trade secrets less secure.

Legal Initiatives in the Earlier Days

In an 1868 U.S. case involving trade secret litigation, the Massachusetts Supreme Court stated: “it is the policy of the law, for the advantage of the public, to encourage and protect invention and commercial enterprise.” The principle articulated by the justice was that “if a man establishes a business and makes it valuable by his skill and attention, the good will of that business is recognized by the law as property.” This case began the evolution of trade secret law in the United States, which has now been in existence for more than a century.

The U.S. Congress enacted the first criminal law protecting intellectual property in 1909. The law covered only copyright violations and only at a minimal level.