Managing the Legal Nexus Between Intellectual Property and Employees

Managing the Legal Nexus Between Intellectual Property and Employees

Domestic and Global Contexts

Elgar Law and Entrepreneurship series

Edited by Lynda J. Oswald and Marisa Anne Pagnattaro

The explosion in intellectual capital coincides with a growing understanding of the importance of human capital to the firm. This book examines the pressing legal issues that arise at the intersections of intellectual property law, employment law, and global trade, such as the use of employment contracts to protect intellectual property, ownership of intellectual property created by the employee, officer liability issues relating to infringement, post-employment confidentiality and non-compete agreements, and inadvertent or deliberate misappropriation or theft of trade secrets.

Chapter 7: Reducing the risk of cross-border trade secret misappropriation

Elizabeth A. Brown

Subjects: business and management, international business, law - academic, intellectual property law, international economic law, trade law, labour, employment law


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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