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Why Legal Experts Are Up In Arms Over a Trade-Secrets Bill Microsoft Loves (cio.com)
itwbennett writes: At a Senate Judiciary Committee hearing on Wednesday, lawmakers heard arguments over the Defend Trade Secrets Act of 2015. The proposed legislation would allow companies to pursue trade-secrets cases in federal court much as they can copyright or patent cases, thereby freeing them from the state-level constraints of today's laws. It also allows for so-called ex parte seizure, enabling a company that thinks a secret has been stolen to ask the government to seize a suspected thief's property without notice, to prevent misuse of that secret. It's the ex parte seizure provision, as well as the bill's potential to increase the duration and cost of trade-secrets litigation, that prompted more than 40 law professors to write a joint letter expressing their concern. Companies have long protected algorithms such as consumer credit-scoring mechanisms under trade-secret law, intellectual property expert and Hamline University professor Sharon Sandeen said in an interview after the hearing. If passed, the new bill could give them new powers to conceal those algorithms, she said. Voicing the opposing view, lawyers from Corning and DuPont cited the increasingly digital and global nature of trade-secrets theft, a sentiment that was echoed in a blog post by Jule Sigall, Microsoft's assistant general counsel of IP policy and strategy.
...sounds to me like Microsoft is setting themselves up to become patent trolls to keep them afloat when their cash cows (Windows and Office) dry up.
Still not getting why the government needs to intervene in the protection of trade secrets. That's why patents exist.
Federal court has zero ethics (yes, I've sat through cases). Not to mention that "ex parte seizure" is inevitably and severely abused.
Trade secrets are a little different than patents or copyrights. A trade secret is something like the full list of KFC's original 11 herbs and spices, or the formula for transparent aluminum. To give an example of the difference between patents, copyright, and trade secrets, etc, let's consider Coca-cola:
The Coca-cola name and logo are trademarks.
If Coca-cola were to come up with a new method of putting carbonation in soft drinks, they might file a patent for that process.
If Coca-cola came up with song as an advertising jingle, they would own the copyright to that song.
And the (secret) formula for Coca-cola is a trade secret.
If this was all that was - it's not.
Ex parte seizure is really problematic, for reasons outlined in the responses in the original article.
In short.
Microsoft says, without complete proof that an ex employee took sourcecode to your company, and now on the word of microsoft alone, without any rights to debate this - all they have to do is to convince a non-technical judge - they can basically shut down your entire company for a period.
There is - in principle - a defence if they do this maliciously, but that's going to be _extraordinarily_ hard to prove absent someone actually committing to paper 'let's fake a complaint and screw this guy'.
The process takes around a week.
In any realistic scenario, this 'express' process is uselessly faster than a month one for other legal action, simply as by that time the code has already been moved.
Well, that...but it is also a nice tidy way to effectively patent the unpatentable. This is an end run around the notion that mathematics is not patentable. Nope, now it's a "trade secret"...cue the angelic choir of thousands of lawyers giving thanks.
Patents are so inconvenient: limited lifetime, you have to publish how you're doing what you're doing. Much easier to just turn trade secrets into secret, infinite-life patents, now with government protection and a nice threat for any small companies that dare to try to compete with you.
Nostalgia's not what it used to be.
Briefly, a kid in Norway named Jon Johansen, along with other programmers in Germany, reverse-engineered the Xing DVD player, and published DeCSS, an independent implementation of the Contents Scrambling System (CSS) that was used on DVDs to deter unsanctioned copying, allowing Linux users for the first time to view DVDs on their computers. Subsequent research among crypto experts yielded more general solutions, and now CSS is effectively a no-op.
The DVD Copy Control Association -- DVD-CCA, the organization that licenses the creation of Hollywood-sanctioned DVD players -- tried to sue DeCSS out of existence in a California court. Their primary argument? That CSS was a trade secret that Johansen had improperly obtained and disclosed.
What was "improper" about it? His reverse-engineering violated the (*snicker*) "license agreement" attached to the Xing player.
Further, the DVD-CCA (incorrectly) argued, everyone who came in contact with DeCSS "knew or should have known" that CSS was a trade secret, and not to traffic in it, and asked the judge to put a restraining order on the Internet to prevent further distribution. (DVD-CCA also tried to argue that reverse-engineering is never proper or appropriate.)
Although the DVD-CCA's case was never resolved, CSS today is effectively useless as a copy protection mechanism, and DeCSS or its functional equivalent is widely available.
This legislation from Microsoft would appear to be an attempt to defend against such activity, and prevent people from ever inspecting or exercising control over their computers again.
Trade secrets are a weird edge case in intellectual property. They are not explicitly called out in the Constitution (as are copyrights and patents), but enjoy recognition in the courts. Unlike trademarks and patents, however, trade secrets do not need to be registered -- they exist solely by fiat (i.e. they exist because the company declares they exist). Trade secrets also do not have a formally defined "limited time" as Constitutionally required of copyrights and patents -- the inherent fragility of maintaining any kind of secret indirectly establishes the trade secret's limited lifetime.
Microsoft's proposal would greatly extend the reach and lifetime of trade secrets beyond their traditional scope.
Editor, A1-AAA AmeriCaptions