Author: David-Levine

Letter from 42 Law Professors Urging Congress to Reject the Defend Trade Secrets Act of 2015

Dear Chairmen Grassley and Goodlatte, and Ranking Members Leahy and Conyers: In August 2014, thirty-one law professors signed a letter in opposition to proposed federal legislation to create a civil cause of action for trade secret misappropriation. We write to express continued concerns about the current version of this legislation, the Defend Trade Secrets Act of 2015 (“DTSA”), S. 1890 and H.R. 3326. While we agree that effective legal protection for U.S. businesses’ legitimate trade secrets is important to American innovation, we believe that the DTSA—which would represent the most significant expansion of federal law in intellectual property since the Lanham Act in 1946—will not solve the problems identified by its sponsors. Instead of addressing cyberespionage head-on, passage of the DTSA is likely to create new problems that could adversely impact domestic innovation, increase the duration and cost of trade secret litigation, and ultimately negatively affect economic growth. Therefore, the undersigned call on Congress to reject the DTSA. Summary of Arguments In recent years, numerous concerns about a federal civil cause of action for trade secret misappropriation have been detailed in analyses prepared by experts in the field of trade secret and intellectual property law. Fundamentally, these experts oppose the legislation because: (1) it will not address the cyberespionage problem that is most often used to justify the adoption of a federal trade secret law; (2) a federal trade...

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An Open Letter to the Sponsors of the Revised Defend Trade Secrets Act

[with Sharon K. Sandeen from the Hamline University School of Law] We write to express our continued concerns about the Defend Trade Secrets Act (“DTSA”) and our willingness to assist you in determining how best to improve enforcement of legitimate trade secret rights. In August 2014, 31 academics signed a letter raising many concerns with similar legislation then pending in the House and Senate. We attach a copy of that letter, which can be found here (the “August 2014 letter”). In the July 29, 2015 press release announcing the new DTSA, the sponsors again identify the harm that they seek to address, namely, that “trade secrets can be stolen with a few keystrokes, and increasingly, they are stolen at the direction of a foreign government or for the benefit of a foreign competitor.” To justify the DTSA, the release argues that (a) current federal criminal law is “insufficient,” (b) the Department of Justice “lacks the resources” to prosecute (presumably) Economic Espionage Act (“EEA”) cases, (c) state law has not stopped “interstate” theft, and (d) Federal courts would be more effective in case administration and discovery. Thus, the release says that the DTSA would “harmonize” United States law, “provide for injunctions and damages,” and make trade secret law “consistent” with existing federal intellectual property law, which we understand to mean simply that there would now be a federal private trade...

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Congress’ Fast Track to Bad Law

Congress appears poised to pass Trade Promotion Authority, otherwise known as ‘fast track,’ for the Trans Pacific Partnership Agreement (TPP). If this happens, it will likely close the door to any possibility of meaningful public input about TPP’s scope and contours. That’s a major problem, as this “21st century trade agreement” encompassing around 800 million people in the United States and eleven other countries, will impact areas ranging from access to medicine (who gets it) to digital privacy rights (who has them). But, unless you are a United States Trade Representative (USTR) “cleared advisor” (which almost always means that you represent an industry, like entertainment or pharmaceuticals), or, under certain limited circumstances, an elected official, your chief source of TPP information is WikiLeaks. In other words, if Julian Assange gets his hands on a draft TPP text, you might see it, once he decides that it should be made public. Of course, you’ll have to hope that the copy that you see is current and accurate. There have been no – not one – formal releases of the TPP’s text. Thus, this 21st century agreement has been negotiated with 19th century standards of information access and flow. Indeed, TPP has been drafted with a degree of secrecy unprecedented for issues like intellectual property law and access to information. Some degree of secrecy and discretion is necessary in any negotiation, but the amount...

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Trade Promotion Authority, the Trans Pacific Partnership, and Secrecy

The New York Times reported this afternoon that a Congressional agreement has been reached on so-called “fast track” authority for the Trans Pacific Partnership Agreement (TPP). This international agreement, having been negotiated under extreme secrecy by 12 countries including the United States, Australia, Canada, Japan, Malaysia and Singapore, is supposed to be an “ambitious, next-generation, Asia-Pacific trade agreement that reflects U.S. economic priorities and values.” Indeed, if it comes into effect, it will be the largest such agreement in history, covering some 800 million people. Unfortunately, its chances of meeting that laudable goal have been severely diminished by the aforementioned secrecy. In theory, “fast track” authority should allow the President to more thoroughly and forcefully negotiate trade agreements with other governments by streamlining the domestic political process. By eliminating much of Congress’ review and amendment process that could force the TPP negotiators back to the table, “trade promotion authority” allows for complex international trade agreements to receive a swift and decisive Congressional sign-off. However, because the TPP has been negotiated largely in secret, with only a precious few outside the government (almost exclusively representing the entertainment and pharmaceutical industries) privy to its text, fast track will have the effect of eliminating the last possibility for anyone outside the above select few to change the contours of the agreement. That’s a significant concern, as the TPP (based upon leaks) covers...

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Here Come the Trade Secret Trolls

As you may have noticed last night in the SOTU, trade secrecy (and trade secret law reform) remains on the national radar screen. Thus, I’m pleased to report that Sharon Sandeen and I have co-authored Here Come the Trade Secret Trolls, published today in the Washington & Lee Law Review Online: http://lawreview.journals.wlu.io/here-come-the-trade-secret-trolls/. The abstract is below: Within the past few years, the U.S. federal government has been forced to confront the massive but hard-to-quantify problem of foreign and state-sponsored cyberespionage against U.S. corporations, from Boeing to small technology start-ups, and (as of this writing) perhaps Sony Pictures Entertainment. As part of that effort, Congress has taken up the Defend Trade Secrets Act and the Trade Secret Protection Act which would create a private cause of action under the federal Economic Espionage Act. This Article addresses the possibility of introducing trolling behavior—using litigation as a means to extract settlement payments from unsuspecting defendants—to trade secret law through creation of a federal private trade secret misappropriation cause of action. Like the existing problem of patent trolls, trade secret trolling has the potential to undermine the structure of trade secret law and create serious problems and costs for innovators across all industries. Thus, this Article addresses the heretofore unexplored link between patent and trade secret trolling established by this legislation. It assesses in detail the benefits and downsides of creation of a federal trade...

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Trade Secrecy and the Trans-Pacific Partnership Agreement: Secret Lawmaking Meets Criminalization

Trade secrecy, arguably the most active but least understood and studied of intellectual property’s doctrines, is on the rise. Over the past two years, there has been increased legislative activity in this space — the most since the revision of the Uniform Trade Secrets Act in 1985. Most prominently, it has been the subject of an alarming report out of the White House documenting increasing risk to US corporations from state-sponsored cyberespionage. Based upon those significant but hard to quantify harms, bills have been introduce in Congress over the past few years designed to amplify the options for aggrieved companies. The perceived inadequacies in the current law have spurred the most recent legislation, known as the Defend Trade Secrets Act and Trade Secrets Protection Act. Additionally, recent news reports involving high damage awards in trade secret misappropriation cases have reminded those who were not paying close attention that trade secret awards can be significant. Moreover, access to trade secrets remains an issue in the ongoing battles over hydraulic fracturing regulations. It stands as a barrier to public and even regulatory access to the chemical composition of fluids used and put into the ground. Those fluids generate some of the main concerns about fracking from an environmental, health and safety perspective. As if that wasn’t enough, it has even appeared as an issue in efforts to abolish the death penalty....

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Professor Letter Opposing Trade Secret Legislation

Sharon Sandeen at Hamline Law and I have authored a letter dated August 26, 2014 and signed by 31 United States legal academics to the Congressional sponsors of the “Defend Trade Secrets Act of 2014” (“DTSA”) and the “Trade Secrets Protection Act of 2014” (“TSPA”) (collectively, “the Acts.”) Click here for the full Letter  Congress has been weighing how to respond to increased cyber-espionage.  The Acts are the latest bills to create a private cause of action under the Economic Espionage Act (EEA).  A copy of the bills can be found at https://beta.congress.gov/113/bills/s2267/BILLS-113s2267is.pdf (DTSA) and http://holding.house.gov/sites/holding.house.gov/files/documents/TSPA%20-%20HOLDNC_018_xml.pdf (TSPA). While the signatories acknowledge “the need to increase protection both domestically and internationally against domestic and foreign cyber-espionage,” as discussed in the letter, we urge the Acts’ rejection for five reasons: Effective and uniform state law already exists. The Acts will damage trade secret law and jurisprudence by weakening uniformity while simultaneously creating parallel, redundant and/or damaging law. The Acts are imbalanced and could be used for anti-competitive purposes. The Acts increase the risk of accidental disclosure of trade secrets. The Acts have potential ancillary negative impacts on access to information, collaboration among businesses and mobility of labor. Any questions about the attached letter can be directed to its authors, Sharon Sandeen (ssandeen@hamline.edu) or me...

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Putting the Public’s Interest Back Into the “Public Interest”

What’s your definition of the “public interest” when it comes to law and lawmaking?  Is it a unitary concept, where we consider the good of society as a whole?  If so, you might think that the public’s interest is in a “public interest” which encompasses “cross-cutting issues” that transcend narrow considerations and allows debate about and among competing interests.  On the other hand, do you view the “public interest” more narrowly?  If so, you might view the public’s interest as served by placing “public interest” in a box separate from other interests, like environmental, labor or intellectual property policy.  From that perspective, the “public interest” is just another consideration in the panoply of considerations that make up society. This sounds like a law professor’s abstract opening question to a class on administrative law about how decisions get made in regulatory agencies.  And it is, but it is also a question that is now front-and-center outside the classroom and in the ongoing battles over who gets to have meaningful access to information and input about international rules for access to medicine, copyright piracy and host of intellectual property law (IP) issues currently being debated in the waning Trans Pacific Partnership (TPP) and the relatively new Trans-Atlantic Trade and Investment Partnership (TTIP)  negotiations.  My question must be answered correctly if we want the United States Trade Representative (USTR ), which is...

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Bad news from the world of fracking and, even more importantly, corporate control of information

A few days ago, the hydraulic fracturing (“fracking”) industry was able to successfully lobby (via Halliburton) to weaken North Carolina’s proposed fracking information access rules.  The result could be that trade secrets – that information that is commercially valuable because it is not publicly known– will be difficult to access not only for the public, but even for the North Carolina Mining and Energy Commission, charged with writing and enforcing the regulations for fracking.  And at least to one MEC commissioner, that’s apparently just fine.  According to a NC Mining and Energy Commission (MEC) member (who was formerly with Halliburton): “The secrecy thing is to me a joke. The secret, such as it is, is only of value to the competitor.”    The notion that this information is only valuable to a competitor is substantively false.  The MEC – itself not a competitor – needs to know this information so as to assure that any environmental, health and safety (“EHS”) concerns are addressed, before those concerns manifest themselves in fracking wells.  Moreover, the public at large – itself not a competitor – has an interest in assuring that EHS concerns are being addressed, and it (or experts within it) needs accurate and complete information to conduct such an assessment. The belief that trade secrets are only of interest to competitors is one of the great myths in intellectual property,...

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WikiLeaks and the Control of Public Debate

“If you want to kill a trade agreement, or any effort to make new law or policy, keep it secret for an excessive amount of time and leave the timing of its eventual release to the law or policy’s skeptics and enemies.”  That should be the lesson of today’s leak of the Intellectual Property (IP) Chapter of the Trans Pacific Partnership Agreement (TPP) by Julian Assange’s WikiLeaks.  Indeed, as Assange himself said upon announcing the leak, “I think that this release is going to pretty much kill it.”  Although the substance itself will garner much opposition (like provisions regarding access to medicine and copyright duration), the surprising fact is that Assange has received much aid in reaching that conclusion from the TPP negotiators themselves because of the hyper-secrecy that has characterized the negotiations. The TPP, a massive, multilateral agreement spanning more than 20 substantive areas, has been described by the United States Trade Representative (USTR), which represents the US in the negotiations, as an “ambitious, next-generation, Asia-Pacific trade agreement that reflects U.S. economic priorities and values.”  But after 19 rounds of negotiation going back four years, there has never been an official release of a draft agreement.  That has meant that highly controversial areas like intellectual property rights have been a public black box – there has been no meaningful way for the public to offer meaningful and timely...

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