However, using case law on patent and copyright pre-emption law as a source of comparison, courts are unlikely to interpret the DTSA to prejudge claims in state contract law.218 In fact, the right of first refusal is criticized as a “brutal” instrument.219 This property may cause courts to avoid using it to monitor the boundary between contract law and Intellectual property in general.220 A Another reason for the court`s caution is that “the question is not relatively simple as to whether to pre-empt a particular state law, but the most complex is whether and how certain parts of contract law can be anticipated without demolishing the entire building.” 221 Consequently, the contours of pre-emption in the context of intellectual property were notoriously unpredictable and inconsistent.222 [85]. See Merges et al., loc. cit. Note 17, page 70 (“The easiest way to establish a confidential relationship is to sign an appropriate contract.”); see also Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1549 (Cir. 11, 1996) (refusal to find a tacit confidential relationship); Smith v. Dravo Corp., 203 F.2d 369, 376–77 (7th Cir. 1953) (establishment of an implicit confidential relationship between negotiators without a confidentiality agreement). The Restatement (Third) of Unfair Competition § 41 states that a confidential relationship is established in one of two circumstances: while trade secret law contracts can serve a valuable information function, companies also use contracts strategically to circumvent the requirements and limitations of trade secret law.
This creates a doctrinal tension between contract law and trade secret law. As this section shows, companies use contracts to circumvent the Trade Secrets Act in four ways: (1) to extend protectable assets; (2) to avoid appropriate confidentiality agreements in progress; (3) eliminate the reverse engineering defence; and (4) impose non-compete obligations that circumvent trade secret requirements and restrictions as a whole. The pervasive use of contract law to undermine the limits and requirements of trade secret law can have a negative impact on employee innovation and mobility. Trade secret holders often include such provisions in contexts where the restricted party has no legal representation, bargaining power, and ability to understand their meaning111 – for example, in contracts with employees and bulk licenses to access software and databases. But in addition to their probative value, contracts play an evasive role in trade secret law. That is, companies use contract law to evade the requirements and limitations of trade secrets by: (1) extending the protectable subject matter; (2) avoid ongoing RER obligations; (3) Elimination of reverse engineering defence; and (4) the imposition of non-compete obligations. Such contractual provisions, which are contrary to trade secrets, appear to occur more frequently – and more problematically – in the context of workers` contracts and consumer licenses for the mass market, where parties are less likely to understand, negotiate and modify unilateral terms. The pervasive use of contract law to circumvent legally agreed trade secret law requirements and restrictions poses risks to cumulative innovation and employee mobility. The Supreme Court has repeatedly emphasized that restricting the reverse engineering of trade secrets is “an essential part of innovation” that “can lead to significant progress in this area.” 143 In concluding that federal patent law does not prejudge state trade secret laws, the Supreme Court has emphasized the reverse engineering restriction because it makes trade secrets “much weaker” than patent law.144 Other courts have also expressed concerns that trade secret law without reverse engineering restrictions interferes with federal patent policy because it ” the. . Trade secret in a state-granted monopoly, similar to the absolute protection afforded by a federal patent.
145 The reverse engineering defence is therefore an important restriction on the rights of trade secret holders, eliminating cumulative innovation concerns. [36]. To obtain a patent, an inventor must apply to the Patent and Trademark Office (“PTO”) and prove that his invention is patentable, useful, new, not obvious and sufficiently disclosed subject matter for others in the relevant technology to understand, manufacture and use. See 35 U.S.C. §§ 101–03, 112 (2012). For a discussion of these and other differences between patent law and trade secret law, see Deepa Varadarajan, Trade Secret Fair Use, 83 Fordham L. Rev. 1401, 1409-11 (2014). [105].
Id. at 903 (“Employees were never informed of a duty of confidentiality. Agreements with employees do not help ECC`s claim for the same reason – ECC has never treated certain information as secret. As a result, the vague wording of the agreements prohibiting the employee from taking “secrets” did not create a duty of secrecy on the part of the employee and there was no misappropriation of funds. »); see also Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1550 (11th Cir. 1996) (discharge of an implied duty of confidentiality if the plaintiffs had not informed the defendant of the “duty of confidentiality.b. the technical documents in question”). [215]. The DTSA includes better protection against whistleblowers, replacing the contradictory state trade secrets law. Section 1833(b) immunizes whistleblowers from liability “under federal or state secrecy law” for the confidential disclosure of trade secrets to government officials.
18 United States.C.A. § 1833(b). For a general discussion of this provision, see Menell, loc. cit. footnote 64. [207]. Unif. Trade Secrets Act § 7; see also id. § 7 cmt.
(“[UTSA] does not apply to an obligation voluntarily assumed by an express or implied contract. The applicability of trade secret non-disclosure obligations and non-compete agreements designed to protect trade secrets, for example, is subject to other laws. »). [208]. See Sandeen, loc. cit., footnote 5, at paragraph 144 (which describes the applicants` attempts to `shift remedies for trade secrets to limited remedies in the event of breach of contract`). Except as provided in section 1833(b), nothing in this chapter shall be construed as anticipating or replacing other civil or criminal remedies under federal, state, Commonwealth, possession or territory law of the United States for the misappropriation of a trade secret, or any other lawful disclosure of information by a government employee pursuant to 552. (commonly referred to as the Freedom of Information Act). [209]. See Graves, note 5 above, at 91 (with the observation that the authors of the UTSA “did not take a position on the interpretation of confidentiality agreements in any way … [which] may reflect a lack of recognition of the problem, a wait-and-see attitude or a general reluctance to restrict freedom of contract”).
[73]. Almeling et al., Litigation in State Courts, loc. cit. O. Note 41, pp. 82-83; see also Tracey, loc. cit. Footnote 44, re 63 (“One of the most widely used and recognized approaches to protecting access to trade secret information is a confidentiality agreement.”). Contract law and intellectual property law have complex relationships. On the one hand, intellectual property owners use contract law to effectively share proprietary technologies, creative works, and information. .