Brooklyn Law School Trade Secrets Symposium
Part 1: Proposed Federal Trade Secrets Law
by Alexander Goldman '14
Congress is considering a Federal trade secrets law to solve a very specific problem: the possibility that an employee of a U.S. company will be at an airport with a thumb drive full of trade secrets before the company can act. This first session of the Trade Secrets Symposium at Brooklyn Law School was moderated by Trade Secrets Fellow Paul Fraulo '15.
Ted Schroeder, Chief Counselor to U.S. Senator Coons (D-DE), told the symposium to take a close look at the case of Gore, Inc., the company that makes Gore-Tex. Kwang Seoung Jeon did not have one thumb drive full of company documents — he had three of them when he was arrested — and a one-way ticket to his native South Korea.
But Professor Christopher Seaman of the Washington and Lee University School of Law said that federalizing trade secret law will not necessarily simplify trade secrets litigation because the federal law, as currently written, explicitly does not preempt state law. Seaman said that the provision is vital in order to avoid the creation of a body of federal common law separate from the states, a situation that existed before the famous 1938 Supreme Court case Erie Railroad Co. v. Tompkins. Seaman added that experimentation at the state level is a strength of the U.S. legal system, not a weakness.
Schroeder replied that antitrust and consumer protection are both under a system of interlocking state and federal legal systems.
Ira Levy '88, partner at Goodwin Procter LLP, suggested that preemption might have been sacrificed in order to ensure the bill passed. He added that practitioners need courts to act quickly because "the value of a trade secret is lost the moment that it is no longer a secret." He suggested that a federal court might act faster because of a provision in the proposed federal law that provides an ex parte process for the seizure of trade secrets.
Seaman asked why the federal law needs the ex parte process. Schroeder replied that, for the most valuable trade secrets, the ex parte process is critical.
During the question and answer period, Professor David S. Levine of Elon University School of Law (currently visiting researcher at Princeton), warned that the ex parte process would have substantial chilling effects. "Google can defend itself, but can a startup," he asked. "What about the cloud? Can you seize a Drop Box or a Google Drive?"