1. A Comparative Legal and Economic View of Global Trade Secret Regimes
Mark F. Schultz
So. Illinois University School of Law
George Mason Center for the Protection of Intellectual Property

2. OECD Trade Secrets Project
Project developed in response to a request from OECD Member countries
Study Team:
Mark F. Schultz ( George Mason University Center for the Protection of IP & Southern Illinois)
Douglas Lippoldt (OECD)

3. Trade Secrets Protection Index
Scores countries’ strength of trade secret protection on a scale of 1 - 5
Thirty-seven countries (so far)
1985 – 2010, five year intervals
An analytical tool, not normative

4. Trade Secrets Protection Index
Covers dozens of questions
Aggregated into five equally-weighted components:
Definition of trade secrets & coverage
Duties and misappropriation
Remedies and restrictions on liability
Enforcement, investigation & discovery
System functioning and related regulation

5. Trade Secrets Protection Index, By Country and Component, 2010
Similarities:
Scope of protection: technical information, confidential business information; ~ know-how
Defences: independent creation
Third-party liability: liable if knowledge or reason to know; generally subject to injunction
Remedies: civil remedies such as injunctions and damages are generally available
Differences:
Civil versus criminal law; role of common law & precedent
Duty of confidentiality – nature and duration
Remedies: types of damages; injunctive relief; seizure and return of materials?
Evidence gathering & discovery: documents? Ex parte search?
Duty of employees: implied or only explicit?
Non-compete agreements: post-employment? Between commercial entities?
Protection of secrets during litigation?
Data exclusivity: availability and duration of protection
Technology transfer regulations?
Trade secrets as property or as rules concerning relationships?
Figure 1. Trade Secrets Protection Index, By Country and Component, 2010
OECD Trade and Agriculture Directorate

7. Evolution of TSPI over time 1985 – 2010, OECD and BRICS Countries

8. Results of OECD Economic Study
Hypotheses:
Innovation effects: by securing investment in R&D, trade secrets encourage innovation
Trade effects: foreign firms are more likely to engage in FDI and trade with countries where trade secrets are protected

11. Essential Features of an Effective Trade Secret system
Definition of trade secrets & coverage
Covers both industrial and commercial information
No extra requirements
Duties and misappropriation
Covers breach of duty and corporate espionage
Remedies and restrictions on liability
Preliminary injunctions
Enforcement, investigation & discovery
Effective Investigation
Related Regulation
A well-functioning legal system

12. Key Points of Divergence Globally
Lowest scoring countries (e.g., China and Russia): Stringent proof requirements that render enforceability very difficult
Higher scoring countries
Criminal protection
Breach of duty only OR breach of duty AND misappropriation
Investigation and discovery procedures
Protection of confidentiality during litigation

13. 4 Key Questions Before Investing or Litigating Across Borders
(1) Is trade secret protection defined “normally”?
Extra requirements?
Do unrelated third parties have duties?
(2) Can I get a preliminary injunction quickly?
(3) Can I investigate my claim effectively?
Via civil discovery?
Via the criminal justice system?
Receptivity of authorities to criminal claims
(4) Can I protect my secrets from further exposure during litigation?

14. Thank you mschult9@gmu.edu
Mark F. Schultz,
George Mason Law, CPIP
Southern Illinois University School of Law