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Why are intellectual property rights necessary when nothing prevents a company from having trade secrets?

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    Because secrets are "secret"? MGM (or whoever) would have a very hard time convincing me to buy its last "Avengers vs Superman vs Alien vs Luke Skywalker" DVD if they give me a blank DVD because it is "secret". – SJuan76 Sep 7 '18 at 21:47
  • I would answer, but the comment from @SJuan76 dispenses with the need to do so, his reasoning applies to trademark and patents just as well as it does to trade secrets. – ohwilleke Sep 8 '18 at 2:32
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Trade secrets must be kept secret. There are plenty of intellectual properties that can't be kept secret. The most obvious ones would be a writer, musician or composer - the whole reason for their work is to publish it and make it available to as many people as possible. How could that possibly be a trade secret? Similar with trademarks. The whole point of a trademark is to be widely visible.

And there are patents. Here the situation is different. Before patent law, inventors kept their inventions indeed secret. Then people realised that this secrecy is in the way of progress. So patent law was created, which gives an inventor rights beyond those of a trade secret, at the cost of having to publish their invention. Even if you invent today, you have the choice of keeping your invention secret and relying on trade secret law, or patenting it and relying on patent law. Again, some inventions are clearly visible. When the bycicle was invented, it was clearly visible to everyone and couldn't be kept secret.

  • Who first "realised that this secrecy is in the way of progress"? – Geremia Sep 9 '18 at 2:24
  • @Geremia Who first realised that the sky is blue? – gnasher729 Sep 9 '18 at 9:17
  • Certainly there must have been a first court decision that thought "that this secrecy is in the way of progress". – Geremia Sep 10 '18 at 17:57
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    Why? I don't know any place where it is illegal to be in the way of progress. Introducing patents was politics, not law. – gnasher729 Sep 10 '18 at 19:52
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Intellectual property law includes trade-secret law.

Trade secret laws are designed to protect information that derives value from being kept secret.

The more traditional areas of IP law (copyright, trademark, patent) are generally designed to protect information that derives value from being disclosed.

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The central premise of IP law is that whoever comes up with an idea should get guaranteed exclusive rights to benefit from that idea for some time. I don't personally agree with it, but obviously we must accept this to meaningfully discuss IP law.

By trade secrets I suppose you mean that a company can DIY its own IP protection by just not telling anyone how it makes a certain product.

One problem here is that if someone steals the trade secret, this "protection" is irreversibly lost. So IP law protects inventors from IP theft, because the thief or anyone else would still not be able to legally benefit from the stolen IP even if they did steal it. This in turn helps discourage IP theft as well.

The other problem is that it is impossible to keep trade secrets 100% secure. No matter what you do, it is possible for someone to reverse-engineer or copy your product once you do produce it. With things like text (books), audio or video it is trivial to copy and anyone can do it. Furthermore, someone might independently come up with the same idea and destroy your competitive advantage.

Now, if the whole point of IP law is that thinking of an idea should be rewarded with exclusive rights to it, then shouldn't the re-inventor be entitled to the protections also? I think so, but the current system rewards only the first inventor, not reinventors. Arguably, the inventor adds something to the collective knowledge of society, while the reinventor would not, so only the former should be incentivized with the promise of a temporary state sanctioned monopoly.

  • "someone might independently come up with the same idea and destroy your competitive advantage" It would seem impossible to prove in court whether something is an independent idea vs. a copied trade secret. – Geremia Sep 9 '18 at 2:22
  • @Geremia What makes you think that? In each case there are witnesses. Witnesses talk. – gnasher729 Sep 9 '18 at 9:20
  • @Geremia Well, suppose you come up with the idea in 2015, then put the blueprint in a sealed envelope and give to your lawyer and start saving up capital to make it a business. Then in 2016, someone else also has the same idea. They happen to find easy capital and start their business in 2017, before you're ready to go. You can prove you had the idea first, but the other guy can also prove he didn't copy you. – Consis Sep 9 '18 at 20:30
  • @Geremia: There's a "clean room" way to copy in software engineering. One group examines the software to be copied in great detail and writes up a specification. This specification now goes to a completely different group of developers who have no contact with the first group. This, when properly done, shows that there was no violation of copyright. – David Thornley Sep 10 '18 at 21:41

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