Academic journal article Federal Communications Law Journal

Injunctive Relief in the Internet Age: The Battle between Free Speech and Trade Secrets

Academic journal article Federal Communications Law Journal

Injunctive Relief in the Internet Age: The Battle between Free Speech and Trade Secrets

Article excerpt


   The last century has seen substantial advances in communications, of which 
   the Internet is only the most recent development. Each new medium, as it 
   was introduced, changed the balance of power in the constitutional equation 
   involving the First Amendment. Every advance in mass communication has 
   enhanced the immediate and widespread dissemination of information, often 
   resulting in great potential for immediate and irreparable harm. With the 
   Internet, significant leverage is gained by the gadfly, who has no editor 
   looking over his shoulder and no professional ethics to constrain him. 
   Technology blurs the traditional identities of David and Goliath. 
   Notwithstanding such technological changes, however, the Courts have 
   steadfastly held that the First Amendment does not permit the prior 
   restraint of speech by way of injunction, even in circumstances where the 
   disclosure threatens vital economic interests. (1) 

The information revolution has led to technological innovations in the movement, storage, and dissemination of information. The Internet, which is defined as "the vast international network of computers ... that connects individuals from many nations ... enabl[ing] them to share an incredible array of information and ideas quickly and relatively inexpensively," represents the foremost product of this revolution. (2) The new communication capabilities created by the Internet allow a person, with good or bad intent, to distribute information to millions of people via a Web site. (3) This ability raises serious implications when trade secret information is posted on the Internet. Once a trade secret becomes publicly available, it loses its legal secrecy, and it can no longer receive special legal protection. (4) Additionally, competitors and everyone else on the Internet can gain access to the information. For those who rely on trade secret protection to guard their inventions, this dilemma presents a growing concern.

Imagine yourself as the CEO or the general counsel of a large company, XYZ, which produces two million widgets annually. To be successful, XYZ must invest a significant amount of company resources in research and development. These funds support engineering and product development to ensure that XYZ will remain ahead of its competitors in developing new products, materials, and processes. Although some of these products have patents, in most cases, XYZ depends on trade secret law to protect its investments, primarily because the trade secret approach requires no application, begins immediately, and encompasses a wide variety of uses. (5) To ensure the guarantee of trade secret protection, XYZ implements many security measures and relies on employee confidentiality agreements.

Each of XYZ's thousands of employees has taken an oath of loyalty and signed a confidentiality agreement. Most employees see themselves as part of a team, but predictably, a few employees become disgruntled or stray at the promise of easy money. Imagine that an angry employee, to retaliate against XYZ or to make some easy money, begins stealing confidential documents. In doing so, this employee pilfers plans that detail the design and production processes of XYZ's most profitable widgets. In an instant, that employee can bring the company to its knees by selling this information to XYZ's competitors, by posting this information on the Internet, or--even worse--by giving the documents to a third party to post on the Internet. As CEO or general counsel, what can you do to protect XYZ?

In the first and second scenarios, in which a competitor pays an employee for the information or the employee has posted the information on the Internet, XYZ has legal recourse. (6) Under trade secret law, XYZ can sue the appropriator for civil damages. (7) In addition, the infringer may also receive criminal sanctions under the Economic Espionage Act. …

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