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Elon Law scholar co-authors groundbreaking study on startups & trade secrecy

David S. Levine, Elon Law’s Jennings Professor and Emerging Scholar, partnered with Ted M. Sichelman of the University of San Diego School of Law to research why young companies in software, biotechnology, medical device, and hardware industries opt to use - or not use - laws that can protect competitive advantage and profits.

Associate Professor David S. Levine

In private industry, there have long been legal protections for new inventions or creative works that qualify for patents and copyrights, respectively.

Additionally, companies use trade secrecy laws that, in some instances, complement patents and, in other instances, are a workaround to lengthy application processes that can cost money while risking the loss of competitive advantages.

But not until now has anyone studied the use of trade secrets by new businesses that historically would apply for patents.

“Why Do Startups Use Trade Secrets?” by Elon Law Associate Professor David S. Levine & Ted Sichelman of the University of San Diego School of Law has been selected for inclusion in a forthcoming issue of Notre Dame Law Review.

Levine and Sichelman draw empirical data from the Berkeley Patent Survey to research why young companies in software, biotechnology, medical device, and hardware industries opt to use - or not use - trade secrecy laws, which, broadly speaking, protect company information not necessarily directly related to a product, but rather can be used for market advantage.

Doing so brought the two scholars to conclusions both obvious and counterintuitive: trade secrecy serves other important aims aside from first-mover advantage, trade secrets may act both as economic complements and substitutes to patenting, and trade secrets may serve as important strategic assets.

“The results of this study help fill a gaping void,” Levine and Sichelman write. “Our hope is that this article inspires others to undertake this difficult but extremely important endeavor, and helps policymakers and the practicing bar understand the complex and shifting dynamics underlying trade secret law, and, more broadly, the reasons for limiting or expanding public access to information.”

Levine was named Elon Law’s Jennings Professor and Emerging Scholar in 2017, an award that recognizes a young faculty member who through his or her research has shown extraordinary promise as a teacher and a scholar. He is an affiliate scholar at the Center for Internet and Society at Stanford Law School and was a 2016-2017 Visiting Research Collaborator at Princeton University's Center for Information Technology Policy.

Levine is also the founder and host of Hearsay Culture on KZSU-FM, an information policy, intellectual property law and technology talk show named as a top five podcast in the ABA's Blawg 100 of 2008.

His scholarship focuses on the operation of intellectual property law at the intersection of technology and public life, specifically information flows in the lawmaking and regulatory process and intellectual property law's impact on public and private secrecy, transparency and accountability.

Eric Townsend,
Staff
8/15/2018 4:50 PM