Editing Trade secret (section)

== By nation ==

=== Commonwealth nations ===

In [[Commonwealth of Nations|Commonwealth]] [[common law]] jurisdictions, confidentiality and trade secrets are regarded as an [[Equity (law)|equitable]] right rather than a [[property]] right.<ref>{{Cite book |last1=Radhakrishnan |first1=Rajagopalan |url=https://books.google.com/books?id=nEc8PtMOuzsC&dq=In+Commonwealth+common+law+jurisdictions%2C+confidentiality+and+trade+secrets+are+regarded+as+an+equitable+right+rather+than+a+property+right&pg=PA211 |title=Intellectual Property Rights: Text and Cases |last2=Balasubramanian |first2=Dr R. Radhakrishnan and Dr S. |date=2008 |publisher=Excel Books India |isbn=978-81-7446-609-9 |language=en}}</ref>

{{See also|Breach of confidence in English law}}

The [[Court of Appeal of England and Wales]] in the case of ''Saltman Engineering Co Ltd v. Campbell Engineering Ltd''<ref>''Saltman Engineering Co Ltd v. Campbell Engineering Ltd'', (1948) 65 P.R.C. 203</ref> held that the action for breach of confidence is based on a principle of preserving "good faith".

The test for a cause of action for breach of confidence in the [[common law]] world is set out in the case of ''Coco v. A.N. Clark (Engineers) Ltd'':<ref>''Coco v. A.N. Clark (Engineers) Ltd'', (1969) R.P.C. 41 at 47</ref>

* The information itself must have the necessary quality of confidence about it;
* That information must have been imparted in circumstances imparting an obligation of confidence;
* There must be an unauthorized use of that information to the detriment of the party communicating it.

The "quality of confidence" highlights that trade secrets are a legal concept. With sufficient effort or through illegal acts (such as breaking and entering), competitors can usually obtain trade secrets. However, so long as the owner of the trade secret can prove that reasonable efforts have been made to keep the information confidential, the information remains a trade secret and generally remains legally protected. Conversely, trade secret owners who cannot evidence reasonable efforts at protecting confidential information risk losing the trade secret, even if the information is obtained by competitors illegally. It is for this reason that trade secret owners shred documents and do not simply recycle them.{{Citation needed|date=August 2007}}

A successful plaintiff is entitled to various forms of [[judicial relief]], including:

* An [[injunction]]
* An [[account of profits]] or an award of [[damages]]
* A [[Declaration (law)|declaration]]

[[Hong Kong]] does not follow the traditional commonwealth approach, instead recognizing trade secrets where a judgment of the High Court indicates that confidential information may be a property right.<ref>{{cite web |title=Trade Secrets (Undisclosed Commercial Information) |url=https://www.ipd.gov.hk/eng/intellectual_property/trade_secrets.htm |website=Intellectual Property Department |publisher=The Government Of Hong Kong Special Administrative Region |access-date=7 September 2020}}</ref>

=== European Union ===

The EU adopted a [[Directive on the Protection of Trade Secrets]] on 27 May 2016.<ref name=eudirective>{{cite web|title=Trade secrets|url=http://ec.europa.eu/growth/industry/intellectual-property/trade-secrets_en|website=European Commission|date=5 July 2016 |access-date=16 April 2018}}</ref> The goal of the directive is to harmonize the definition of trade secrets in accordance with existing international standards, and the means of obtaining protection of trade secrets within the EU.<ref name=eudirective/>

Unlike other protections, like in the US, the trade secrets in the EU are not absolutely seen as an IP right, as it gives the holder no exclusive rights. It is more a protection against the unfair use or publication of the secret information.<ref name=eudirective/>

=== United States ===

Within the U.S., trade secrets generally encompass a company's proprietary information that is not generally known to its competitors, and which provides the company with a competitive advantage.<ref>{{Cite web|url=https://www.uspto.gov/ip-policy/trade-secret-policy|title=Trade Secret Policy|website=United States Patent and Trademark Office|publisher=Office of Policy and International Affairs|access-date=December 1, 2019}}</ref>

Although trade secrets law evolved under state common law, prior to 1974, the question of whether patent law preempted state trade secrets law had been unanswered. In 1974, the [[United States Supreme Court]] issued the landmark decision, ''Kewanee Oil Co. v. Bicron Corp.,'' which resolved the question in favor of allowing the states to freely develop their own trade secret laws.<ref>''Kewanee Oil Co. v. Bicron Corp.'', 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974)</ref>

{{See also|List of United States state trade secret laws}}

In 1979, several U.S. states adopted the [[Uniform Trade Secrets Act]] (UTSA), which was further amended in 1985, with approximately 47 states having adopted some variation of it as the basis for trade secret law. Another significant development is the [[Economic Espionage Act of 1996|Economic Espionage Act (EEA) of 1996]] ({{usc|18|1831|1839}}), which makes the theft or misappropriation of a trade secret a federal crime.

This law contains two provisions criminalizing two sorts of activity:

# {{uscsub|18|1831|a}}, criminalizes the theft of trade secrets to benefit foreign powers.
# {{usc|18|1832}}, criminalizes their theft for commercial or economic purposes.

The statutory penalties are different for the two offenses. The EEA was extended in 2016 to allow companies to file civil suits in federal court.<ref>{{cite journal|url=https://www.forbes.com/sites/ericgoldman/2016/04/28/the-new-defend-trade-secrets-act-is-the-biggest-ip-development-in-years/|title=The New 'Defend Trade Secrets Act' Is The Biggest IP Development In Years|journal=[[Forbes (magazine)|Forbes]]|date=April 28, 2016|first=Eric|last=Goldman}}</ref>

On May 11, 2016, President Obama signed the [[Defend Trade Secrets Act]] (DTSA), 18 U.S.C. §§ 1839 et seq., which for the first time created a federal cause of action for misappropriating trade secrets.<ref>{{cite web|url=http://www.ipwatchdog.com/2016/05/24/defintion-trade-secret-dtsa/id=69262/|title=Definition of a 'Trade Secret' Under the DTSA|last=Toren|first=Peter J.|date=May 24, 2016|publisher=IPWatchdog|access-date=8 September 2016}}</ref> The DTSA provides for both a private right of action for damages and injunction and a civil action for injunction brought by the Attorney General.<ref>{{cite web|url=http://www.americanbar.org/groups/business_law/news/2016/06/protections_of_then.html|title=Protections of the Newly Enacted Defend Trade Secrets Act|last=Kelton|first=Jeff|date=June 24, 2016|publisher=American Bar Association|access-date=8 September 2016}}</ref>

The statute followed state laws on liability in significant part, defining trade secrets in the same way as the Uniform Trade Secrets Act as,

{{Quote
|"all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information."
}}

However, the law contains several important differences from prior law:

# Because it is a federal law, trade secret cases can be prosecuted in federal courts with concomitant procedural advantages.
# It provides for the unusual remedy of preliminary seizure of "property necessary to prevent the propagation or dissemination of the trade secret," 18 U.S.C. §1836
# It provides for remedies to include royalties in appropriate cases and exemplary damages up to two times the actual damages in cases of "willful and malicious" appropriation, 18 U.S.C. §1836(b)(3).
The DTSA also clarifies that a United States resident (including a company) can be liable for misappropriation that takes place outside the United States, and any person can be liable as long as an act in furtherance of the misappropriation takes place in the United States, 18 U.S.C. §1837. The DTSA provides the courts with broad injunctive powers. 18 U.S.C. §1836(b)(3).

The DTSA does not preempt or supplant state laws, but provides an additional cause of action. Because states vary significantly in their approach to the "inevitable disclosure" doctrine,<ref>The "inevitable disclosure" doctrine allows an employee's new employment to be enjoined if the court determines that the nature of his new duties will inevitably lead to a disclosure or improper use of trade secrets of the prior employer.  It has been accepted in a number of states (see, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995)(applying Illinois law), and flatly rejected in others (see, e.g., Schlage Lock Co. v. Whyte, 101 Cal. App. 4th 1443 (2002) (applying California law).</ref> its use has limited, if any, application under the DTSA, 18 U.S.C.§1836(b)(3)(A).<ref>A Court may grant an injunction, provided the order does not "prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information that the person knows...." 18 U.S.C. §1836(b)(3)(A)(i)(I).</ref>