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INTRODUCING A TAKEDOWN FOR TRADE SECRETS ON THE INTERNET

2007 Wis. L. Rev. 1041 (2007) Elizabeth A. Rowe I. Introduction Late on a Friday afternoon in October, Wal-Mart executives discover that the content of their sales circulars for the entire Christmas season has just been posted on fatwallet.com, a bargain-shoppers discussion forum. The posted content includes Wal-Mart's closely guarded sale prices. Fearing that competitors may use the valuable pricing information to compete unfairly, Wal-Mart's attorneys immediately contact the operators of the Web site to request that they remove Wal-Mart's trade-secret information. The operators refuse. They contend, correctly, that since the information is not copyrighted, they have no obligation to remove it under the Digital Millennium Copyright Act (DMCA), which does not cover trade secrets. The information remains posted throughout the weekend and for another four days until Wal-Mart obtains a temporary restraining order from the court to have the material removed. By then, however, overjoyed shoppers have distributed the circulars all over the Internet, and, using this information, Wal-Mart's competitors are modifying their planned promotions. This Article explores, for the first time, an existing void in trade-secret law. When a trade-secret owner discovers that its trade secrets have been posted on the Internet, there is currently no legislative mechanism by which the owner can request that the information be taken down. The only remedy to effectuate removal of the material is to obtain a court order, usually either a temporary restraining order or a preliminary injunction. When a trade secret appears on the Internet, the owner often loses the ability to continue to claim it as a trade secret and to prevent others from using it. Accordingly, trade-secret owners bear the burden of being vigilant and acting quickly if there is to be any chance of preserving the trade-secret status of the information. The current requirement of a court order for a takedown not only is costly but also is too slow for trade-secret owners because of the speed with which users distribute information over the Internet. Obtaining a temporary order from a court would likely take no fewer than several days.

Full post as published by The Trade Secrets Vault on February 19, 2008 (boomark / email).