Hrdy and Lemley, ‘Abandoning Trade Secrets’

A trade secret, according to the conventional understanding, ‘expires’ only once it is no longer kept secret. Keep the secret for decades or even centuries, as with the formula for Coca-Cola, and you can potentially protect it forever. In this article, we argue that conventional wisdom is wrong. A company can ‘abandon’ its trade secrets by failing to derive value from them. Trade secrets don’t literally have to be ‘used’ to be protected. But abandonment of trade secrets through failure to derive value is still a very real possibility. Trade secrets can fail to derive economic value simply because they have become obsolete. But trade secret abandonment can also happen due to the conduct of the owner. A company that has been benefitting from a trade secret by selling products based on it can exit the market. It can take a product off the market and replace it with a newer version. Or it might develop a secret but then choose not to enter the market at all …

Hrdy, Camilla Alexandra and Lemley, Mark A, Abandoning Trade Secrets (February 7, 2020).

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