Domestic and Global Contexts
Elgar Law and Entrepreneurship series
Edited by Lynda J. Oswald and Marisa Anne Pagnattaro
Chapter 7: Reducing the risk of cross-border trade secret misappropriation
Trade secrets are among the most valuable and vulnerable corporate assets. As a form of intellectual property, they can be used to protect confidential business information in a wide range of industries. Manufacturers often rely on them for protection of valuable information, as do service industries such as advertising, marketing, business consulting and financial services. Falling outside the more clearly delineated areas of patent, copyright and trademark law, they may be the most challenging intangible property to protect from theft by foreign competitors. Companies doing business across borders face at least two critical issues with regard to trade secrets. First, the growth of the global workforce and the increasing portability of technology make trade secret loss more likely and costly. Second, the fragmentary nature of international trade secret protection and the differences in protection regimes from country to country make it especially difficult to litigate cross-border claims once a loss occurs. Trade secret misappropriation has an enormous financial impact. The director of the National Security Agency (NSA), General Keith Alexander, has characterized online espionage as the “greatest transfer of wealth in history.” In May 2013, the Commission on the Theft of American Intellectual Property, an independent and bipartisan initiative, estimated that the total revenue lost by U.S. companies alone as a result of intellectual property theft is approximately $300 billion, comparable to the total value of U.S. exports to all of Asia. There is a more subtle cost as well.
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