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Protecting trade secrets




Comprehension check.

1. What points of view exist about the purpose of a business in society?

2. When can ethical issues arise?

3. What have you learnt about one of the laws of the USA?

4. How do you understand the following: “bad ethical practices drive out good ethical practices”?

5. How does Kidder explain the word ‘trilemma’?

6. What points should ethics policy include to be successful?

 

A company can protect its confidential information through non-compete non-­disclosure contracts with its employees. The law of protection of confidential information effectively allows a perpetual monopoly in secret information – it does not expire as would a patent or trademark. The lack of formal protection, however, means that a third party is not prevented from independently duplicating and using the secret information once it is discovered.

The sanctioned protection of such type of information from public disclosure is viewed as an important legal aspect by which a society protects its overall economic vitality. A company typically invests time and energy (work) into generating information regarding refinements of process and operation. If competitors had access to the same knowledge, the first company’s ability to survive or maintain its market dominance would be impaired. Where trade secrets are recognized, the creator of property regarded as a ‘trade secret’ is entitledto regard such ‘special knowledge’ as intellectual property.

Trade secrets are not protected by law in the same manner as trademarks or patents. Probably one of the most significant differences is that a trade secret is protected withoutdisclosure of the secret.

To acquire rights in a trademark under U.S. law, for example, one simply uses the mark in the course of business. (It is possible to register a trademark in the U.S. but, though registration confers some advantages including stronger protection in certain respects, it is not required in order to get protection at all. Other nations have different trademark regimes and the following remarks may not apply to them). Assuming the mark in question meets certain other standards of predictability, it is protected from infringement on the grounds that other users might confuse consumers as to the origin or nature of the goods once the mark has been associated with a particular supplier. By definition, a trademark enjoys no protection until and unless it is ‘disclosed’ to consumers, for only then are consumers able to associate it with a supplier or source in the requisite manner.




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