Cornell Law Review

Every intellectual property right, like every property right generally, has a moment of birth. Whether and when that moment occurs depend on doctrines of original acquisition. In most IP regimes, these doctrines are so fundamental that they’ve been reduced to a single verb. One can get a patent only by inventing, or a copyright only by authoring. The modern law of trade secrecy, however, remains strangely quiet on its own rules of original acquisition. While it asks whether the claimed information is secret enough and whether the owner is guarding that secret, it sidesteps the basic question of what the would-be owner must do in order to earn legal protection in the first place.

That inattention is becoming more troubling. Firms are increasingly weaponizing the broad definition of trade secrets to assert rights over any information they want to shield from public scrutiny, from workplace injury statistics to employee diversity data to consumer complaints. In many cases, the firm made no real effort to develop the information, and in the most egregious ones, the firm would rather the information not exist at all. Still, under the black-letter eligibility test, it’s not clear that those facts would bar a claim.

In this Article, however, we argue that trade secrecy does indeed possess a neglected doctrine of original acquisition—and its proper application could dispose of some of these perverse claims. In order to receive the legal entitlement, we contend, a claimant must have made some meaningful economic investment in causing the information to exist. While tying trade secret protection to development cost has a long pedigree at common law, it doesn’t get the attention it deserves today because it’s not mentioned in any governing statute. Yet as we show, many cases nevertheless continue to treat development cost as a freestanding eligibility consideration anyway. Emphasizing investment within trade secrecy’s law of original acquisition is a policy lever hiding in plain sight within classical doctrine. While conditioning eligibility on this sort of sweat equity is famously abjured by both copyright and patent law, we explain why it makes far more sense for trade secrets.

To read this Article, please click here: Earning Trade Secrets.