1

We all know that employees have a duty not to disclose or use trade secret information. But can trade secret be defined so broadly that, because of the duty of non-disclosure, an employee can no longer do any work for anyone else in the field, including publishing academic papers?

On the one hand, trade secrets can be ideas. On the other hand, because the same science and technology are behind the workings of everything, ideas are inevitably connected to one another. For example, we know that all math formulas can be derived from well-known axioms and theorems. If an employee derives a non-trivial math equation at work that presumably is key to the firm's competitive edge, it becomes a trade secret. Is it true? If it is true, it is fine, although it can be a bit awkward occasionally. Imagine she goes back to school. "Hey professor, I know the answer to that question, but I cannot write it down on the exam paper, because the answer happens to be identical to a trade secret of my former employer that I derived 25 years ago, which I have a duty not to disclose."

Take it for granted that the above derived equation is a trade secret. After leaving her job, she derives another similar equation under a different circumstance, again through general math theorems. Is this new equation trade secret? If it is true, it would be a lot more awkward, because then she has to say to her professor: "Hey professor, I deserve an A, but I cannot answer any of the questions in the exam, because all of them are in whole or in part related to a trade secret formula I derived for my former employer 25 years ago."

If Newton had discovered gravity when he had been working for some firm to whom the law of gravity was important, then it appears to me that the law of gravity would become a trade secret, and it essentially means Newton could not do physics for anyone else. Of course, it would not prevent me, Tom, who had never worked for that firm, to rediscover gravity and publish it.

People were asking for realistic examples. One example I can think of is algorithms in the game industry. In 3D games, it is necessary to detect if a character bumps into the wall or other characters. This is called collision detection. The algorithm is some mathematical equations derived from basic 3D geometry. A lot of work is in the public domain (thank God!). But let's say that a star software developer found some opportunities to optimize the public algorithm to make it run faster on some occasions, and went ahead to make the tweaks at work, so that now the algorithm is 30% faster and important to the competitive edge. The code itself of course belongs to the firm by copyright laws. However, what about the tweaks that are essentially math equations? My guess is that they belong to the firm too as trade secrets. Going further, let's say the person leaves for a different firm or goes on to pursue a Ph.D. in 3D geometry. Is she not only not allowed to use the same tweaks (not code but only abstract equations derived for the last firm), but also likely not able to make new, similar tweaks? You may say maybe she should be creative and make different tweaks. But the challenge she is trying to solve (the algorithm is too slow) is the same and the solution is similar too, because everything is derived from first principles, and there is no getting around. It is like asking "Can you be more creative and come up with a new formula that calculates how long it takes for an apple to drop to the ground from the three-story house?" Not possible. Okay maybe one can use the relativity theory for the new firm. But for the next, next job, she runs out of formulas. From the view of the new firm, it is not that bad, because it is perfectly legal for her colleague, who has never worked for her old firm, to invent these same tweaks or similar tweaks. But for her personally, the consequence was terrible.) In her Ph.D. study, does it mean that she can never derive any equations that involve the derivation of the tweaks? (Because math theorems are all linked with each other, does it mean she can never work on math? Maybe she can write novels instead.)

If this is true, the consequence is profound. It implies that a lot of high-level creative knowledge worker will have to switch field when they switch firm or go back to school.

The reason for this question is twofold:

  1. There are a lot of resources and discussions on how to protect trade secrets from the employer's perspective, but little is said about the employee's rights.

  2. Trade secret protection, without clarity, can be abused by the deep-pocketed as a tool of intimidation, hampering innovation. Explicit lawsuits might be rare, but the implicit threats of potential lawsuits can intimidate people out of doing what they are talented to do.

  • I don't have the necessary expertise for a "proper" answer, but for copyright, this problem has already been solved. Nevertheless, I would be very surprised if you could apply trade secret law to general ideas rather than more specific pieces of information. – Kevin Aug 31 at 1:04
  • Copyright is very specific. My understanding is that it applies to the verbatim written text or code. Except for 'fair use,' people cannot use the same text or code as is without authorization. A trade secret, in my understanding, is much broader and vaguer and can potentially be abused. That is why I am asking. – Tom Bennett Aug 31 at 1:36
  • This comes up sometimes with classified information in the US: if you've done classified work in a field, it can be hard to later do unclassified work in that field because you need to make sure that you're not drawing on any classified knowledge. If there's a chance you are, the NDA for classified information requires you to submit whatever you wrote to the government for a security review. Classified info is different from normal trade secrets, but you might be interested in that data point. – cpast Aug 31 at 16:44
  • I can totally see the parallel, and also from a layman's point of view, it makes a bit more sense for classified information, because in terms of importance, maybe classified information does have something to do with national security, and, in terms of ubiquity, classified information is rarer and so overall impact smaller. But trade secret is everwhere. Almost anything anyone produces at work can be claimed as trade secret. – Tom Bennett Aug 31 at 16:50
  • Note that principles of physics and math can't be trade secrets at all - Newton's law of gravity and einstein's special relativity can't be any more trade secrets than the fundamentals of graph theory. A specific formula in itself can't be copyrighted (it's an idea) and standing for itself it can't be a trade secret. It's just math. Its expression (painted to a wall in green ink on blue) could be copyrighted and what can be done with it could be a trade secret. – Trish Sep 1 at 2:51
5

Can an idea be a trade secret? Certainly -- most trade secrets are ideas.

The thing is, unlike copyright, patents, or trademarks, trade secret isn't a very strong form of protection. Trade secret legislation only protects against certain "unfair" methods of obtaining the secret. Independent invention is perfectly fine: if I figure out on my own what the secret formula for Coca-Cola is, there's nothing the Coca-Cola company can do to stop me. Reverse engineering is also fine: if I take a bottle of Coke to a chemistry lab and analyze the ingredients, there is again nothing the Coca-Cola company can do.

Additionally, a company wishing to make something a trade secret needs to take active steps to preserve that secret. Continuing the Coca-Cola example, they might require anyone reading the formula to first sign an agreement to not disclose what they read.

  • I understand that if an outsider independently discovers the same idea, the idea is not considered a trade secret for her. It is easy to document reasonable protection, as every firm has IT departments that apply permissions to files. My question is concerned with the employees. Is the trade secret law so broad that once a certain employee has worked in the field, she cannot work in the same field for a different firm or publish papers (because all ideas are connected)? – Tom Bennett Aug 31 at 2:53
  • @TomBennett: In that case, you're really asking about NDAs and contract law, which are a different albeit related subject. – Kevin Aug 31 at 2:56
  • I can be totally wrong. Do employees need to sign NDAs? I feel even if there is nothing in the employment agreement on trade secrets, trade secrets might still be automatically covered because that constitutes work for hire. I was looking at Wikipedia on the topic of trade secret and it seems to say that. Not a lawyer though and thus why I am asking – Tom Bennett Aug 31 at 3:16
  • "work for hire" is a specific thing in U.S. copyright law. – George White Aug 31 at 4:14
  • Good catch. According to Nolo Trade Secret FAQ, employees are automatically bound by a duty of confidentiality not to disclose or use trade secret information. So no NDA required for employees. My question is about given that employees are bound not to disclose or use trade secret information, then can trade secret be defined so broad that they can no longer work or publish papers in the same field? – Tom Bennett Aug 31 at 4:26

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.