Global Moves To Give Corporations Yet More Legal Weapons By Strengthening Laws Protecting Trade Secrets

As well as these efforts to introduce new laws in the US and EU directly, international treaties too are being used as a vehicle for promoting the enhanced protection of trade secrets.

from the too-much-is-never-enough dept
Glen Moody  January 6, 2014

Techdirt often discusses the problems with intellectual monopolies such as copyrights, patents and trademarks. These grant powers to exclude others from using something — creative works, inventions, words and phrases. Increasingly, they create dense thickets of obligatory permissions that make it hard or even impossible for others to build on pre-existing work. That may serve the purposes of the monopolist, but is frequently to the detriment of society. Despite the fact that the enforcement options available to holders of such intellectual monopolies have been repeatedly and disproportionately strengthened in recent years, it seems that too much is never enough: there is now a move to boost another kind of monopoly right, that of trade secrets.These already exist of course, but by one of those strange coincidences, new initiatives to enhance greatly the reach and exclusionary power of trade secrets have appeared simultaneously on both sides of the Atlantic. In the US, there are a pair of bills — the “Defend Trade Secrets Act of 2014″ (pdf) and the “Trade Secrets Protection Act of 2014″ (TSPA – pdf) — both aiming “to provide Federal jurisdiction for the theft of trade secrets, and for other purposes.” The Fair Competition Blog offers the following summary:

If enacted, the TSPA would create a private right of action (very similar to that provided by the Uniform Trade Secrets Act (“UTSA”)); permit the civil ex parte seizure of relevant evidence and of the trade secrets, to prevent their further use or disclosure; permit such actions to be brought under a five-year statute of limitations; and requiring the Attorney General to issue an annual report on the international threat of trade secrets misappropriation. There is apparently a 57% chance of the TSPA being enacted.

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The USPTO is also active in this area. Here is a notice of a public meeting on the subject, to be held in January at its offices in Virginia:

The protection of U.S. trade secrets from misappropriation is an Administration priority. As noted in the Administration Strategy on Mitigating the Theft of U.S. Trade Secrets (February 2013), “trade secret theft threatens American businesses, undermines national security, and places the security of the U.S. economy in jeopardy.” In pursuit of the goals of the Administration Strategy through information sharing and discussion, the United States Patent and Trademark Office will hold a public symposium on issues relevant to the protection of trade secrets. Topics to be discussed include losses due to trade secret theft and challenges to protecting trade secrets, the intersection of patent and trade secret protection, trade secret issues in civil litigation, trade secret protection in foreign jurisdictions, and proposed responses to the threat of trade secret theft in the U.S.

Meanwhile, in the EU, there is a proposal for a major “Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure” (pdf). The new rights would be very broad, prompting a group of leading civil organizations to write an open letter expressing their concerns about them:

We strongly oppose the hasty push by the European Commission and Council for a new European Union (EU) directive on trade secrets, which contains overly-broad protection and inadequate safeguards. This unbalanced piece of legislation will result in legal uncertainty and endanger freedom of expression and information, corporate accountability, information sharing and, possibly, innovation, rather than create a competitive and sound business environment in the EU, as the Commission claims.

If the draft directive, which the Commission published in November 2013, is passed, consumers, workers, researchers, journalists and whistleblowers in the EU will be at risk. The definition of ‘trade secrets’ in the draft directive is unreasonably broad, enabling almost anything within a company to be deemed as such. Unsurprisingly, the draft directive text is strongly supported by multinational companies because it would enable them to sue anyone who “unlawfully acquires, uses or discloses” their so-called trade secrets. Instead, the right to freely use and disseminate information should be the rule, and trade secret protection the exception.

As well as these efforts to introduce new laws in the US and EU directly, international treaties too are being used as a vehicle for promoting the enhanced protection of trade secrets. Back in October, David Levine produced a helpful analysis of what we know about the trade secrets provisions in TPP:

The elevation of trade secrecy is baked into the most recent leaked May 2014 IP chapter from the Trans Pacific Partnership Agreement (TPP). TPP, which is concluding yet another negotiating round today, is bringing trade secrecy to the international stage through efforts to harmonize IP law across continents and cultures. The role of secrecy is varied from country to country, but that has not stopped the TPP negotiators from apparently proposing language that would require criminal sanctions for unauthorized access to trade secrets.

As far as TAFTA/TTIP is concerned, we know that the lobby group Business Europe has been pushing for the inclusion of “strong trade secrets protections, combined with a commitment to effective enforcement in the TTIP” (pdf), and doubtless many companies and lobbyists have done the same. Moreover, an EU document leaked in March 2014 confirms that trade secrets are a “clear priority for the US” — one that is unlikely to meet much resistance from the European Commission, given the plans for an EU Directive on the subject. The participation of the USTR in both the TPP and TTIP negotiations ensures close synchronization between them, so we can probably expect the existing bad ideas from TPP appearing in TAFTA/TTIP too.

Assuming those provisions are still present in the final texts of TPP and TAFTA/TTIP — and assuming that those agreements are ratified — they will boost significantly the current campaign from corporations around the world to turn trade secrets into yet another powerful legal weapon, just as patents, copyrights and trademarks have already become.

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