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PRINCIPLES FOR RESOLVING CONFLICTS BETWEEN TRADE SECRETS AND THE FIRST AMENDMENT

58 Hastings L.J. 777 (March, 2007) Pamela Samuelson Introduction Preliminary and permanent injunctions are routinely granted in trade secret cases without offending the First Amendment, and this is as it should be. In the ordinary trade secret case, the misappropriator of trade secrets is an errant licensee, a faithless employee or former employee, an abuser of confidences, a trickster who uses deceit or other wrongful means to obtain the secrets, or a knowing recipient of misappropriated information who is free-riding on the trade secret developer's investment. In such cases, injunctions merely require parties to abide by express or implicit agreements they have made, to respect the confidences under which they acquired secrets, and to refrain from wrongful conduct vis-à-vis the secrets. On rare occasions, defendants invoke the First Amendment as a defense to claims of trade secrecy misappropriation. There is no consensus in the caselaw or law review literature about whether trade secrets are categorically immune (or nearly so) from First Amendment scrutiny and whether preliminary injunctions forbidding disclosure of informational secrets should be considered prior restraints on speech. This Article addresses these and related questions and offers a set of principles for mediating the tensions that occasionally arise between trade secrets and the First Amendment. Part I considers why conflicts between trade secrecy law and the First Amendment have thus far been relatively rare. Many trade secret injunctions do not raise First Amendment concerns either because of the nature of the secrets or of the conduct that trade secret law regulates. Various limiting principles of trade secrecy law mediate most free-speech-related tensions likely to arise when someone wants to disclose information that another claims as a trade secret. Part II suggests that conflicts between trade secret and First Amendment interests may increase in the upcoming years. The increased use of mass-market licenses aimed at maintaining secrecy for information that would otherwise be lawful to acquire and disclose is one source of greater tension. Another arises from proposals to strengthen trade secret rights to safeguard them from threats posed by the Internet. DVD Copy Control Association v. Bunner illustrates these trends. If trade secret rights become stronger, conflicts with free speech interests become more likely. Part III considers the contention that the First Amendment should have no role as a defense in trade secret cases, a view that the California Supreme Court arguably endorsed in Bunner III. This Part criticizes, among other things, the court's reliance on a characterization of trade secrets as property as a reason to reject First Amendment defenses in trade secret cases. Part IV concludes that preliminary injunctions against disclosure of informational trade secrets should not be treated as prior restraints in ordinary trade secret cases. However, third parties who obtain trade secrets without participating in their misappropriation and who desire to publicly disclose these secrets as newsworthy contributions to public discourse should not be enjoined from such disclosures without satisfying the rigorous First Amendment prior restraints doctrine. Part V considers several other First Amendment due process issues, such as whether the burden of proof in third party disclosure cases should be higher than in normal trade secret cases and whether appellate review of constitutionally relevant facts should be de novo when First Amendment defenses have been raised.

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