Trade secrets are many business's most valuable assets. From Google’s algorithm to Coca-Cola’s secret recipe, trade secrets are becoming increasingly important to businesses and our economy. What if state governments could simply misappropriate these trade secrets without liability? Sadly, this situation is not uncommon. Many state governments have misappropriated trade secrets with virtual impunity. This is because the doctrine of sovereign immunity protects state governments from liability. This leaves businesses that deal with the government without a way to recover for the misappropriation of their trade secrets. This result is especially damaging because once a trade secret is no longer “secret” then it loses its protection. There have even been cases where a state government has given a business’s trade secret to a direct competitor.
Expressly waiving the state’s sovereign immunity in each state’s versions of the Uniform Trade Secrets Act (UTSA) would be the best way to protect economically valuable trade secrets from being misappropriated by the government. This would both give these businesses a way to recoup their losses and serve as a deterrent so that the government would be less likely to misappropriate trade secrets. This Note also considers the viability of alternatives to expressly waiving sovereign immunity in the state’s version of the UTSA, including bringing suit under a state’s Tort Claims Act statute. This Note illuminates the problem with having state governments evade liability for trade secret misappropriation and highlights the fact that it should be addressed now as trade secrets are rapidly becoming an increasingly integral part of our economy.
Secrets, Sovereigns, and States: Analyzing State Government's Liability for Trade Secret Misappropriation,
J. Intell. Prop. L.
Available at: https://digitalcommons.law.uga.edu/jipl/vol28/iss1/5