In the absence of trade secret laws, the costs to firms to protect their trade secrets would be substantial. Some relatively minor costs would be for example security passes, but more expensive would be for example hiring only family members in order to increase the trust or to reduce the number of the people in some sections, thus leading to inefficiency. When the trade secret law protection is ideal, the companies can spend less money on securing the trade secrets from theft and espionage, which reduces indirect costs. Optimal trade secret laws increases the expected cost of stealing to the unlawful acquiring and this conclusively reduces the private investments in security measures. The increased costs of stealing may lead to companies …show more content…
Trade secret laws are efficient only if the sum of indirect costs and enforcement costs are less than the indirect costs without trade secrecy laws, because including enforcement costs can affect the selection of efficient legal rules. When the deterrence works so that it would reduce stealing, there is less need for companies to take pre-protective measures and also avoid litigation, which is costly. In this situation, the costs are low, and trade secret laws advance efficiency. If the enforcement costs are high, the beneficial effects of trade secret laws, such as reducing investments in precaution and litigation needs to be low, in order for trade secret laws to improve social welfare.
It could be argued that trade secret theft is difficult to detect. The usual signs of theft may not be present, since we are dealing with information, and also the fact that only acquiring the information unlawfully is considered to be a theft. Proving the theft may be difficult, since it is perfectly lawful to reverse engineer or discover the information independently. Hence trade secret laws should be optimized so that the deterrence effect of the theft is so high that it can compensate the high enforcement
…show more content…
Compared to patents, where the protection by patent laws differs much from trade secret laws, without trade secret laws, there would be a gap in protecting ideas and information, which in any case should be protected at least in some way. Optimal trade secret laws increases the expected cost of stealing to the unlawful acquiring and this conclusively reduces the private investments in security measures. If the enforcement costs are high, the beneficial effects of trade secret laws, such as reducing investments in precaution and litigation needs to be low, in order for trade secret laws to improve social
...efits from adopting unfair business practices and discouraging competition are much higher than the expected penalty and punishment. With changing time, there is need to make these laws more effective and relevant.
In week 10 of spring semester we discussed chapter 11’s Intellectual Property Law. “Property establishes a relationship of legal exclusion between an owner and other people regarding limited resources.” In this chapter, we learn that the Constitution allows Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors to the exclusive Right to their respective writings and discoveries.”
“Protecting your intellectual property is crucial to your business.” (Hinson, 2014) When business have intellectual property that is going to be popular or helpful in advancing there business, they have to take measures to ensure that the ideas or prototypes are protected from other that may steal the intellectual property. In the United States, many laws or safeguard steps have to be followed in order to preserve the intellectual property. A business owner has the right to protect the intellectual property, because the failure to do so could result in demise of the business itself.
Economics can have controversial ideas, and this can be expressed in terms of crime. Economic theory would suggest that there is an ‘optimal level of crime’. As Stigler (1970) argues, ‘there is one decisive reason why society must forego ‘complete’ enforcement of the rule: enforcement is costly.’ The extent of enforcement of laws depends upon the amount of resources devoted to the task. Stigler goes on to argue that society could make certain crime does not pay by paying enough to apprehend most criminals, but such a level of enforcement would of course be expensive.
The aim of this essay is to critically discuss how the law of passing off and trade mark law have common roots and therefore are, in many respects, similar. I will begin with a short brief history of trade mark law and the law of passing off. I move on to discuss the similarity between trade mark law and the law of passing off with reference to relevant case law and statutes. Although, passing off and trade mark law deal with overlapping factual situations, s 2(2) of the Trade Mark Act 1994 maintains passing off as a separate cause of action. When a trade mark is threatened by the actions of third parties the proprietor will bring an action for both passing off and trade mark infringement which both share many similarities. However, they are
In the 1700s, there was no law surrounding theft, mostly because at that time there was no government nor constancy with laws. It has also been noticed that there seems to be no judicial precedent, where cases bind future cases. All cases seem to
Free trade enhances national security by making countries so fiscally free that masterminded mischance changes into a relentlessly remote probability.
The term “trade secret” is often bandied about without a true understanding of what it is and why it is important. Trade secrets are important because they serve to protect your valuable, and often confidential, information from getting into the wrong hands and being used inappropriately. Every entrepreneur can benefit from knowing these important details about trade secrets.
Espionage is defined as the act or practice of spying.1 The term ‘industrial espionage’ , also known as ‘corporate espionage’ or ‘cyber espionage’, is the act of stealing trade secrets through the removal, duplicating or recording of highly confidential or valuable information in order to gain a competitive advantage. It is defined as the use of illicit means by more aggressive competitors to disrupt their rival’s operations or gain access to their sensitive information for a better competitive edge.2 While industrial espionage involves the theft of information for commercial purposes, which is obviously illegal, competitive intelligence is the legal gathering of information through conventional practices such as picking up scrap information through attending trade shows or through sources readily available i.e. corporate publications, patent filings and websites.3 Trade secrets are a form of intellectual property thus industrial espionage is most commonly linked with technology-heavy industries, especially in the computer and auto sectors where a great deal of money is splurged on research and development since technological change in this modern era has become a growing importance to business performance.
Intellectual property (IP) is defined as property that is developed through an intellectual and creative processes. Intellectual property falls under the category of property known as intangible rights, which includes patents (inventions of processes, machines, manufactures, and compositions of matter), copyrights (original artistic and literary works of), trademarks (commercial symbols), and trade secrets ((product formulas, patterns, designs). Intellectual property rights has a significant value to both individuals and businesses, providing in the case of large companies, over one half of their value on return. Since intellectual property rights are so important to the U.S. economy and its citizens, federal and state law provides protection, for example, civil damages and criminal penalties to be assessed against infringers. Due to the importance of intellectual property to a business, I don’t think that its protection and enforcement is going to be a thing of the past.
One of the most cited arguments for intervention is that of protecting jobs and industries from unfair foreign competition (Hill). While industries like aerospace are protected given their importance for national security, job protection appears as a result of unions and industries putting political pressure given the threat of more efficient foreign firms (Hill). Many countries achieve this by increasing the tariffs on imports of foreign products. What really happens when a certain industry is ...
There are many reason that why is it important to protect one’s intellectual property. Some of the reason are Creator being accused as a theft, Loss of Reputation, Loss of income, Loss of Asset and Loss of Authority Rights.
...elated Aspects of Intellectual Property Rights) has not only made it easier for companies to register their trademark in one country or another but it has also extended their level of protection against competitors or counterfeiters.
Intellectual property is information, original ideas and expressions of the persons mind that have profitable value and are protected under copyright, patent, service mark, trademark/trade secret regulation from replication, violation, and dilution. Intellectual property includes brand items, formulas, inventions, data, designs and the work of artists. It is one of the most tradable properties in the technology market.