Trade secrecy and common law confi dentiality: The problem of multiple regimes

The Law and Theory of Trade Secrecy: A Handbook of Contemporary Research

Volumn , Issue , 2011, Pages 77-108

  Graves, Charles Tait ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

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References (85)

1. This chapter is thus distinct from the ongoing philosophical debate in the law reviews whether trade secret law is best premised on property, contract or some other free- standing rationale. For two contributions that helped sharpen the debate over the past decade, see Robert G. Bone, A New Look at Trade Secret Law: Doctrine in Search of Justifi cation, 86 Cal. L. Rev. 241 (1998); Miguel Deutch, The Property Concept of Trade Secrets in Anglo- American Law: An Ongoing Debate, 31 U. Rich. L. Rev. 313 (1997).
2. The other two areas of confl ict in trade secret law - disputes between two businesses over a non- disclosure agreement and espionage- like activities under civil or criminal law - are rare in comparison to departing employee disputes. Moreover, and for reasons explained in part below, courts apply a much more consistent body of rules in such disputes.
3. Innovation policy as a fi eld of inquiry encompassing the whole of intellectual property law has received some major treatments in recent years, but still remains a nascent fi eld. See generally Suzanne Scotchmer, Innovation and Incentives (MIT Press, 2004) (general survey of innovation regulation in the United States, with a special focus on research institutions; some mention of trade secret law, though patent regulation is the major focus); William M. Landes and Richard A. Posner, The Economic Structure of Intellectual Property Law (Harvard University Press, 2003) (analysis of diff erent fi elds of intellectual property law, including trade secret, from a law and economics perspective).
4. More than 40 states and the District of Columbia have enacted versions of the Uniform Act. South Carolina, North Carolina and Alabama have enacted their own comprehensive trade secret statutes. New York, Massachusetts, New Jersey and Texas follow common law formulations. See James Pooley, Trade Secrets § 2.03[7][a] (2008).
5. See, e.g., Naturalawn of Am., Inc. v. West Group, LLC, 484 F.Supp.2d 393,
6. (D. Md. 2007) (customized aspects of otherwise public software protectable under Maryland UTSA); Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514 (1997) (customer list protectable under California law).
7. See, e.g., LinkCo, Inc. v. Fujitsu Ltd., 230 F.Supp.2d 492, 498 (S.D.N.Y.
8. 2) ('courts have held that there can be no trade secret protection, as a matter of law, if the secrecy is necessarily lost when the design or product is placed on the market'); Stilwell Dev. Inc. v. Chen, 11 U.S.P.Q.2d 1328, 1331 (C.D. Cal. 1989) (sanctioning plaintiff for alleging trade secrets in a product already sold to customers before time of alleged misappropriation); Chicago Lock Co. v. Fanberg,
9. F.2d 400, 405 (9th Cir. 1982) (defendant reverse engineered lock codes; no liability).
10. See generally Robert P. Merges, Peter S. Menell and Mark A. Lemley, Intellectual Property in the New Technological Age 33-116 (Aspen Publishers, 2006) (overview of trade secret law focusing on Restatement and UTSA approaches, with some commentary on contract and non- solicitation issues); William H. Francis and Robert C. Collins, Patent Law 7-69 (West Group, 2002) (overview of trade secret law with excerpts from cases under the Restatement and the UTSA).
11. Some of these goals are made explicit in the section of the Uniform Trade Secrets Act that directs courts to harmonize UTSA rulings with those from other states. See, e.g., Cal. Civ. Code § 3426.8 ('This title shall be applied and construed to eff ectuate its general purpose to make uniform the law with respect to the subject of this title among states enacting it').
12. As discussed below, the UTSA enactments do not bar contract- based claims over trade secrets, which is similar to the Supremacy Clause rule that there is no federal pre- emption of contract- based claims over unpatented technology information. See, e.g., Cal. Civ. Code § 3426.7(b)(1) (UTSA does not aff ect 'contractual remedies, whether or not based upon misappropriation of a trade secret'); cf. Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979) (holding that federal pre- emption of claims over unpatented, non- secret technology does not apply to contract claims).
13. Cases expressing the common law hostility to non- competition agreements are numerous. Recent examples include Cook Sign Co. v. Combs, 2008 WL
14. 8267, *7 (Minn. Ct. App. August 26, 2008) (unpublished) (noting Minnesota's disfavor of non- competition covenants while affi rming non- competition covenant); Gleeson v. Preferred Sourcing, LLC, 883 N.E.2d 164, 172 (Ind. Ct. App.
15. 8) (partially enforcing covenant after noting that such contracts 'are in restraint of trade and are not favored by the law').
16. Some of the recent non- competition covenant cases citing trade secrets as a basis for such contracts include Certainteed Corp v. Williams, 481 F.3d 528,
17. -30 (7th Cir. 2007); and SD Protection, Inc. v. Del Rio, 498 F.Supp.2d 576,
18. (E.D.N.Y. 2007). A list of non- competition contract cases citing trade secret protection as the main goal, or at least one of the main goals to be served, would likely encompass hundreds of decisions.
19. There does not appear to be a comprehensive history of non- competition and related non- solicitation covenants. The direct root of the modern noncompetition covenant are post- employment restrictions imposed in England as the traditional guild and apprentice system gradually dissolved. The general concepts, however, likely developed earlier. See generally Harlan M. Blake, Employee Agreements Not to Compete, 73 Harv. L. Rev. 625, 632-40 (1960) (describing how English courts moved toward greater acceptance of noncompetition covenants from the sixteenth to nineteenth centuries); cf. Robert P. Merges, From Medieval Guilds to Open Source Software: Informal Norms, Appropriability Institutions, and Innovation, Conference on the Legal History of Intellectual Property, November 13, 2004, at *6 (available at papers.ssrn.com/ sol3/papers.cfm?abstract_id=661543) (noting that the guild system permitted restrictions on solicitation of workers from other masters as early as the fourteenth century).
20. It should be noted that, as with the confi dentiality contracts and alternative torts discussed later in this chapter, some courts have stated that non- competition covenants can regulate information said to be 'confi dential', but not a trade secret. See 225 A.2d 288, 291 (Maryland 1967) (noting that non- competition covenants can protect information said to be confi dential but not a trade secret). Either way, the point remains the same: the non- competition agreement is fi rst and foremost a means to regulate employee use of information learned on the job.
21. For a recent and high- profi le example, see John Markoff , IBM Sues to Block Executive's Move to Apple, New York Times, October 31, 2008 ('The company said that Mr. Papermaster had been one of its top 300 managers and that he had access to a wide range of the company's intellectual property and trade secrets').
22. California, which prohibits almost all non- competition covenants, is the exception. California courts have analyzed employee mobility concerns in rejecting trade secret- based 'inevitable disclosure' injunctions as a court- created form of non- competition order. See, e.g., Whyte v. Schlage Lock Co., 101 Cal. App. 4th
23. 3 (2002) (discussing California's public policy in favor of employee movement and barring non- competition covenants while regulating trade secret misuse).
24. See MacDermid, Inc. v. Selle, 535 F.Supp.2d 308, 316-18 (D. Conn. 2008) (injunction barring new employment based on both non- competition covenant and inevitable disclosure- type reasoning); Ciena Corp. v. Jarrad, 200 F.3d 312,
25. -4 (4th Cir. 2000) (same); Lumex, Inc. v. Highsmith, 919 F.Supp. 624, 630-5 (E.D.N.Y. 1996) (same).
26. See, e.g., Gillian Lester, Restrictive Covenants, Employee Training, and the Limits of Transaction- Cost Analysis, 76 Ind. L.J. 49, 68-9, 71-6 (2001) (criticizing some economists' willingness to uphold all non- competition covenants, but also promoting a view that such covenants protect employer investments in training without analyzing whether such training takes place); Stewart E. Sterk, Restraints on Alienation of Human Capital, 79 Va. L. Rev. 383, 391-2, 406-7 (1993) (assuming that protection of employer investment in specialized training is a valid basis for non- competition covenants, without analyzing innovation theory); Paul H. Rubin and Peter Shedd, Human Capital and Covenants Not to Compete, 10 J. Legal Stud. 93, 99, 102 (1981) (examining purported economic rationale for non- competition covenants based on 'the economic logic underlying the law'; assuming that 'contracts with such covenants occur almost entirely in industries and situations in which training is important'; asserting that 'such contracts are needed to lead to effi cient levels of investment in training when the person receiving training is unable to pay for the human capital by accepting reduced wages').
27. See Edward M. Schulman, An Economic Analysis of Employee Noncompetition Agreements, 69 Denv. U. L. Rev. 97, 102, 108, 110, 115 (1992) (assuming that benefi ts to employer outweigh limiting employee mobility without considering eff ects on innovation and the wider economy, assuming that the absence of noncompetition covenants would deter employers from hiring employees because they will fear trade secret theft; failing to consider whether trade secret law itself reasonably allays such assumed concerns; also assuming without evidence that employers provide 'expensive training' when there are such covenants in place).
28. Only the rare case takes employee training into account when determining the validity and scope of a non- competition covenant. See, e.g., 7's Ent., Inc. v. Del Rosario, 143 P.3d 23, 32 (Haw, 2006) (employer's provision of training as well as 'confi dential' information to low- level travel industry employee justifi ed three- year non- competition covenant for the Honolulu area). It should be noted that Colorado has a unique statute governing non- competition covenants which, among other things, permits such covenants 'for recovery of the expense of educating and training an employee who has served an employer for a period of less than two years'. See Colo. Rev. Stat. § 8- 2- 113.
29. Courts often reject non- competition covenants signed after the job begins, and thus that have no tie to the employee's salary or other consideration. See, e.g., Access Organics, Inc. v. Hernandez, 175 P.3d 899, 903-4 (Montana, 2008) (reversing preliminary injunction in favor of former employer where non- competition agreement was signed four months after employment began and where employer off ered no new consideration).
30. I am unaware of any empirical study on the prevalence of such terms in business- to- business and business- to- employee contracts, but many years of experience examining such contracts tells me that, at least in the technology sector, express public domain exceptions are ubiquitous in the former, and much less common in the latter.
31. Non- employee trade secret cases between business partners exist, but are relatively rare. See generally South East Auto Dealers Rental Assoc., Inc. v. Ez Rent to Own, Inc., 980 So.2d 89, 100-1 (La. Ct. App. 2008) (trade secret claim against licensee for extra- contractual use of licensed secrets).
32. See, e.g., American Paper & Packaging Prod., Inc. v. Kirgan, 183 Cal. App. 3d 1318, 1325 (1986) ('An agreement between employer and employee defi ning a trade secret may not be decisive in determining whether the court will so regard it'); International Settlement Design, Inc. v. Hickey, 1995 WL 864463, *5 (Penn. Ct. Comm. Pleas June 29, 1995) (unpublished) ('Since we have already concluded that the information here does not rise to the level of a "trade secret" as defi ned in Pennsylvania law, it cannot be contractually protected').
33. See, e.g., Engineering Excellence, Inc. v. Meola, 2002 WL 31248192, *5 (Ohio Ct. App. October 8, 2002) (unpublished) ('Appellant correctly asserts that confi dential information does not have to rise to the level of a trade secret in order to be the subject of a valid non- disclosure agreement between employer and employee'); Berneir v. Merreill Air Engineers, 770 A.2d 97, 103 (Maine,
34. 1) ('The confi dential knowledge or information protected by a restrictive covenant need not be limited to information that is protected as a trade secret by the UTSA'); Allen v. Creative Serv., Inc., 1992 WL 813643, *2 (R.I. Sup. Ct. July 6, 1992) (unpublished) ('While every business interest is not worthy of protection through a restrictive covenant, a business interest worthy of such protection need not rise to the level of a "trade secret"').
35. See Elcor Chem. Co. v. Agri- Sul, Inc., 494 S.W.2d 204, 213 (Tex. Ct. App.
36. 3) (emphasizing the defendants' confi dentiality contracts).
37. See Hauck Mfg. Co. v. Astec Industries, Inc., 376 F.Supp.2d 808, 814 (E.D. Tenn. 2005) (seeking to harmonize jury verdict that rejected trade secret claim but found confi dentiality contract breached; questionable logic held that trade secret requirements of independent value and reasonable measures distinguished trade secret information from that protected by confi dentiality contract).
38. The jury did not award damages for the breach, but the real question is the potential for confusion in Tennessee trade secret law introduced by the court's strained reasoning. See 376 F.Supp.2d at 815.
39. Another, more far- reaching proposal to limit the employer's need to establish secrecy also asserts that companies do not litigate over non- secret information. See Jonathan R. Chally, Note, The Law of Trade Secrets: Toward a More Effi cient Approach, 57 Vand. L. Rev. 1269, 1291 (2004) ('Moreover, rational commercial entities will not incur litigation costs attempting to protect generally known information because competitive forces preclude those entities from recouping these litigation costs. Therefore, courts would rarely be faced with an attempt to assert exclusive ownership over information that is generally known'). Recognizing that both employers and employees sometimes engage in aggressive and self- centered conduct seems a necessary precondition for eff ective discussion of employer and employee interests.
40. See, e.g., Cal. Civ. Code § 3426.7(b(1)) ('This title does not aff ect (1) contractual remedies, whether or not based upon misappropriation of a trade secret').
41. See National Conference of Commissioners of Uniform State Laws, Uniform Trade Secret Act, Commissioners' Comment to Section 7 (1979) (UTSA 'does not apply to duties voluntarily assumed through an express or an impliedin-fact contract. The enforceability of covenants not to disclose trade secrets and covenants not to compete that are intended to protect trade secrets, for example, are governed by other law').
42. See Genzyme Corp v. Bishop, 460 F.Supp.2d 939, 951 (W.D. Wisc.
43. 6) (plaintiff pleaded alternative claims described as 'confi dential, non- secret information').
44. As an English treatise noted in the early 1970s, trade secret law 'is rather confused', and had been pursued under theories of 'property, contract, bailment, trust, fi duciary relationship, good faith, [and] unjust enrichment'. See G.W. Paton and David P. Derham, Jurisprudence § 118(a) (Oxford University Press. 1972) (citation omitted). California saw a similarly wide variety of labels attached to trade secret claims between 1916 and the enactment of the UTSA in 1985. See generally Charles T. Graves, Nonpublic Information and California Tort Law: A Proposal for Harmonizing California's Employee Mobility and Intellectual Property Regimes under the Uniform Trade Secrets Act, 2006 UCLA J. L. & Tech. 1 (2006).
45. See Imax Corp. v. Cinema Techs., Inc., 152 F.3d 1161 (9th Cir. 1998) (allowing a tort claim for unfair competition over non- secret information; ruling based on a Ninth Circuit misreading of California law); Kamin v. Kuhnau, 374 P.2d 912,
46. -18 (Oregon 1962) (fi nding former employees liable for unfair competition even if plaintiff sold products disclosing the information at issue and even if information could have been located elsewhere); Franke v. Wiltscheck, 209 F.2d 493, 495-6 (2d Cir. 1953) (former employees liable even though claimed secrets revealed in marketed product and expired patent). For a detailed summary of such cases under both tort and contract causes of action, see Charles T. Graves, Trade Secrets as Property: Theory and Consequences, 15 Georgia J. Intell. Prop. L. 39, 51 (2007).
47. See Franke, 209 F.2d at 495 (stating that its holding was valid under New York, New Jersey or Massachusetts law).
48. California's version states: 'This title does not aff ect (1) contractual remedies, whether or not based upon misappropriation of a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, or (3) criminal remedies, whether or not based upon misappropriation of a trade secret'. See Cal. Civ. Code § 3426.7(b).
49. See National Conference of Commissioners on Uniform State Laws, Uniform Trade Secrets Act § 7 (1979) ('Eff ect on Other Law. (a) This Act displaces confl icting tort, restitutionary, and other law of this State pertaining to civil liability for misappropriation of a trade secret [with exceptions for contract, criminal law, and "other civil liability or relief that is not based on misappropriation of a trade secret"]').
50. Five state Supreme Courts, for example, have issued rulings in favor of UTSA pre- emption over common law trade secret- type claims. See Mortgage Specialists, Inc. v. Davey, 904 A.2d 652, 665 (N.H. 2006) (criticizing Wisconsin ruling in Burbank Grease); RK Enterprise, LLC v. Pro- Comp Management, Inc.,
51. S.W.3d 685, 689-90 (Ark. 2004); Savor, Inc. v. FMR Corp., 812 A.2d 894,
52. (Del. 2002); Frantz v. Johnson, 999 P.2d 351, 357-8 (Nevada 2000); Weins v. Sporleder, 605 N.W.2d 488, 492 (South Dakota 2000).
53. In non- UTSA, Restatement jurisdictions, courts sometimes face similar issues when a plaintiff alleges torts with titles other than 'trade secret misappropriation' and argues that these labels support a broader defi nition of protectable information. See, e.g., Lamorte Burns & Co., Inc., 770 A.2d 1158, 1166 (N.J.
54. 1) (holding that employer can bring tort claims against employee for information that does not 'rise to the level of a trade secret', and suggesting that such information 'may otherwise be publicly available'); Continental Dynamics Corp. v. Kanter, 408 N.Y.S.2d 801, 802 (N.Y. Ct. App. 1978) ('[W]here customer lists do not rise to the level of trade secrets, an employee's "physical taking" or "studied copying" may, nevertheless, form the basis for a cause of action for unfair competition'); cf. Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 267 (5th Cir. 2007) (applying Texas trade secret law and limiting plaintiff to trade secret claim, rather than permitting other tort claims premised on a lower standard of protectable information).
55. California's UTSA, for example, contains provisions indicating that the statute operates to govern both winning and losing claims. Most important, the statute provides for an award of attorneys' fees and costs to a defendant where a claim is brought in 'bad faith'. See Cal. Civ. Code § 3426.4.
56. See Burbank Grease Serv., LLC v. Sokolowski, 717 N.W.2d 781, 789-94 (Wisc. 2006) (ruling, over strong dissent, against pre- emption of alternative tort claims despite pre- emption clause in Wisconsin UTSA).
57. See Abanco Int'l, Inc. v. Guestlogix, Inc., 486 F.Supp.2d 779, 781-2 (N.D. Ill. 2007).
58. See Cenveo Corp. v. Slater, 2007 WL 527720, *1 (E.D. Pa. February 12,
59. 7) (holding that Pennsylvania UTSA does not displace alternative claims unless a trade secret is established); Stone Castle Financial, Inc. v. Friedman, Billings, Ramsey & Co., 191 F.Supp.2d 652, 659 (E.D. Va. 2002) (ruling that UTSA preemption applies only if 'it can be clearly discerned that the information in question constitutes a trade secret').
60. See, e.g., ClearOne Comm., Inc. v. Chiang, 2008 WL 4153767, *2 (D. Utah September 3, 2008) (holding, without analysis, that 'The court is persuaded by the minority view as explained in such cases as Burbank Grease . . . Accordingly, ClearOne's state law claims based on the unauthorized use of the Honeybee Code are preserved if the Honeybee Code is not found to be a trade secret').
61. Two of the very few courts to engage in a lengthy analysis and recognize that the alternative confi dentiality torts would create a back- up layer of protection for non- secret information were Diamond Power Int'l, Inc. v. Davidson,
62. F.Supp.2d 1322, 1345-6 (N.D. Ga. 2007) (considering confl icting case law, weighing public policies, and fi nding conversion claim pre- empted because it was based on 'the taking of supposedly proprietary information'; 'it would make little sense to go through the rigmarole of proving information was truly a trade secret if a plaintiff could alternatively plead claims with less burdensome requirements of proof'); Hauck Mfg. Co. v. Astec Indus., Inc., 375 F.Supp.2d 649, 661 (E.D. Tenn.
63. 4) ('If the information is a trade secret, the plaintiff 's claim is pre- empted; if not, the plaintiff has no legal interest upon which to base his claim. Either way, the claim is not cognizable').
64. Some of the cases in this under- analysed area of law include Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 157-60 (1989) (voiding state statute that prohibited the use of unpatented, public technology information under the Supremacy Clause); Confold Pacifi c, Inc. v. Polaris Indus., Inc., 433 F.3d 952,
65. -60 (7th Cir. 2006) (unjust enrichment claim based on non- secret product design information pre- empted); Ultra- Precision Mfg., Ltd. v. Ford Mtr. Co., 411 F.3d 1369, 1380 (Fed. Cir. 2005) (same holding as to state law unjust enrichment claim where technology information was not alleged to be a trade secret); Joyce v. GM Corp., 551 N.E.2d 172, 175 (Ohio 1990) (conversion claim based on nonsecret technology ideas pre- empted).
66. It is important to reiterate that these regimes are not the same in every state. California rejects most non- competition covenants, and North Dakota has a similar prohibition. See Edwards v. Arthur Andersen LLP, 44 Cal.4th 937,
67. -50 (Cal. 2008) (reaffi rming state's statutory ban on non- competition contracts); North Dakota Century Code § 9- 08- 06 (2008) (statute barring most noncompetition covenants). Other jurisdictions, as noted above, have clear precedent rejecting the alternative confi dentiality torts.
68. See Ingersoll- Rand Co. v. Ciavatta, 542 A.2d 879, 894 (N.J. 1988). Although the court held that such a concept should be narrowly construed in the postemployment 'holdover' context, the court nonetheless expanded the reach of unoffi cial trade secret law into inventions that a former employee creates after leaving that are not based on former employer trade secrets.
69. The question whether historical forms of employee mobility restrictions were premised on economic goals, social control or other factors is a fruitful area for research for the scholar with time and resources. Some historical regulation of employee mobility may have been strictly for economic ends. See, e.g., Fernand Braudel, Civilization and Capitalism: The Wheels of Commerce
70. -9 (University of California Press, 1982) (describing eighteenth century competition for skilled weavers between Flanders and England and the 'draconian measures' sometimes employed to limit mobility and thus prevent industrial decline). Other regulations may have had an ethical or other non- economic premise. See, e.g., 1 William Blackstone, Commentaries on the Laws of England 417 (University of Chicago Press, 1979 (1769)) (in a seeming judgment of commercial morality, explaining the basis of restrictions on soliciting another's employees by describing the employee's labor as the 'property' of the employer). I am unaware of any historical study in this area.
71. To cite one example, the Ninth Circuit has applied California noncompetition and trade secret law in a manner less favorable to employees than rulings in California state courts. See Arthur Anderson, 44 Cal.4th at 949-50 (noting and rejecting the Ninth Circuit's line of cases interpreting California's prohibition on non- competition covenants to allow 'narrow restraints' on competition); Self Directed Placement Corp. v. Control Data Corp., 908 F.2d 462, 467 (9th Cir. 1990) (allowing claim for 'common law misappropriation' over seemingly generic training materials that were not trade secrets).
72. See, e.g., Mortgage Specialists, Inc. v. Davey, 904 A.2d 652, 667 (N.H. 2006) (on UTSA pre- emption issue, reviewing majority and minority positions in other states and siding with majority); Cadence Design Sys., Inc. v. Avant! Corp., 29 Cal.4th 215, 225 (2002) (in deciding whether the California UTSA treats misappropriation as a continuing tort for purposes of the statute of limitations, surveying law in other jurisdictions).
73. For a relevant and extensive description of the internal fi rm pressures and increases in hourly billing at large fi rms in recent years, see generally Mark Galanter and William Henderson, The Elastic Tournament: A Second Transformation of the Big Law Firm, 60 Stan. L. Rev. 1867 (2007) (noting that intense pressure to maintain and please clients within large fi rms leads to diminished attention to issues such as gender and ethnic diversity - and, it could be added, general attention to the policy issues underlying specifi c cases).
74. The list of important articles and notes on trade secret law published in
75. 7-8 (those that go beyond mere practice guide or case summary) includes Michael Ahrens, Note, Wisconsin Confi dential: The Mystery of the Wisconsin Supreme Court's Decision in Burbank Grease Services v. Sokolowski and its Eff ect upon the Uniform Trade Secrets Act, Litigation, and Employee Mobility, 2007 Wisc. L. Rev. 1271 (2007)Sarah Gettings, Note, Burbank Grease Services, LLC v. Sokolowski: Frustrating Uniformity in Trade Secret Law, 22 Berkeley Tech. L.J. 423 (2007); Charles T. Graves, The Law of Negative Knowledge: A Critique, 15 Tex. Intel. Prop. L.J. 387 (2007); Charles T. Graves, Trade Secrets as Property: Theory and Consequences, 15 Georgia J. Intel. Prop. L. 39 (2007); Mark R. Lemley, The Surprising Virtues of Treating Trade Secrets as IP Rights, 61 Stan. L. Rev. 311 (2008); David Levine, Secrecy and Unaccountability: Trade Secrets in Our Public Infrastructure, 59 Florida L. Rev. 135 (2007); Julie Piper, Note, I Have a Secret?: Applying the Uniform Trade Secrets Act to Confi dential Information that Does Not Rise to the Level of Trade Secret Status, 12 Marq. Intel. Prop. L. Rev.
76. (2008); Michael Risch, Why Do We Have Trade Secrets?, 11 Marq. Intel. Prop. L. Rev. 1 (2007); Pamela Samuelson, Principles for Resolving Confl icts Between Trade Secrets and the First Amendment, 58 Hastings L.J. 777 (2007); Sharon K. Sandeen, Kewanee Revisited: Returning to First Principles of Intellectual Property Law to Determine the Issue of Federal Preemption, 12 Marq. Intel. Prop. L. Rev. 299 (2008).
77. The webpage for the California State Bar IP Section and the Trade Secret Standing Committee can be found at www.calbar.ca.gov.
78. The New York Broadcast Employees Freedom to Work Act, barring noncompetition covenants for 'any on- air or off - air employee of a broadcasting industry employer' was signed into law by the governor on August 6, 2008. See Governor Paterson Signs 'Broadcast Employees Freedom to Work Act' Among Package of Bills Signed into Law, www.state.ny.us/governor/press/2008pressarchive.html (last visited January 18, 2011); www.assembly.state.ny.us/leg/?bn=S02393&sh=t (text of statute, last visited January 18, 2011); Gary Ventura, Just Clause? Trying to Change Channels, Rochester City Newspaper, February 22, 2006, www.rochestercitynewspaper.com/archives/2006/02/Just- cause- Trying- to- changechannels (article describing lobbying eff orts by American Federation of Television and Radio Artists; last visited January 18, 2011).
79. A federal approach that permitted 'inevitable disclosure' injunctions, for example, would overturn California's prohibition of that form of trade secret litigation.
80. See James H.A. Pooley, Mark A. Lemley and Peter J. Toren, Understanding the Economic Espionage Act of 1996, 5 Tex. Intell. Prop. L.J. 177, 194 (1997).
81. An example of seemingly exaggerated trade secret misappropriation is a
82. 2 study by PricewaterhouseCoopers, the United States Chamber of Commerce and the ASIS Foundation purporting to show that U.S. companies lost U.S. $50 billion from trade secret theft in 2001. The study suff ers from obvious fl aws. It apparently relied on self- reporting from companies without requiring identifi cation of the alleged secret, without criteria for public domain testing of the alleged secrets, without criteria for valuation, and without criteria for defi ning theft. The study also does not consider innovation policy. See generally Trends in Proprietary Information Loss: Survey Report (2002) (purporting to show that in 2001 companies suff ered losses of 'proprietary information and intellectual property' worth more than U.S. $50 billion dollars; study relied on self- serving responses to a survey by companies who apparently estimated the degree and economic value of their own losses, with no mention how or whether secrecy was considered).
83. For proposals for federal trade secret law that do not address the concerns raised in this chapter, see R. Mark Halligan, Protection of U.S. Trade Secret Assets: Critical Amendments to the Economic Espionage Act of 1996, 7 J. Marshall Rev. Intell. Prop. L. 656 (2008); Christopher Rebel J. Pace, The Case for a Federal Trade Secrets Act, 8 Harv. J.L. & Tech. 427 (1995).
84. See Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262-6 (1979) (federal pre- emption does not apply to a commercial contract for royalty payments after a patent expires); Darling v. Standard Alaska Prod. Co., 818 P.2d 677, 682 (Alaska
85. 1) (explaining how the federal Supremacy Clause rules do not apply to state law contract and trade secret claims).