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Home > Law > DePaul Law Review > Vol. 74 > Iss. 1

 

Abstract

Why do countries enact stronger legal protections for trade secrets? Existing

research on other types of intellectual property (IP) rights suggests at

least three potential mechanisms. First, more powerful countries, such as

the United States, coerce other countries into implementing stronger IP

rights by threatening to enact trade sanctions against them. Second, countries

agree through international legal instruments to strengthen their IP

protections in exchange for benefits in other issue areas, especially trade.

Third, countries that are open to capital flows increase their IP rights

through regulatory competition with other countries to attract or retain

multinational investment. This Article provides empirical evidence for an

alternative mechanism, using data on the trade secret protection levels of

seventeen Organisation for Economic Co-operation and Development

(OECD) countries and twenty OECD trading-partner countries during

the period of 1985 to 2010. This Article demonstrates that countries

with civil-law legal systems were statistically more likely to implement

increases in trade secret protections over time, all else being equal. Consequently,

the findings in this Article provide support for emulation as

a causal mechanism for increased trade secret protections. This Article

argues that civil-law countries saw a lack of domestic-led innovation

as an impediment to economic growth and sought to spur innovation

by reducing legal uncertainty in the trade secret realm. In doing so, they

emulated the relatively stronger trade secret protections of common-law

countries. This Article provides a novel contribution to the literature on

the diffusion of IP laws and holds significant implications for U.S. IP

policy abroad. In particular, U.S. policymakers’ efforts at shifting collectively

held ideas about trade secrets through exchanges with foreign

officials, like those that occur through the U.S. Patent and Trademark

Office’s IP attaché programs in foreign countries, offer substantial promise

for raising other countries’ trade secret protections to emulate those of

common-law countries like the United States.

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