Coatings World - July 2014

to include complementary tools of trade secret protection, including copyright + trade secret synergies. We will expand into the additional complementary fields of trade mark, trade name, trade dress and other ways in which customer confidence and loyalty is garnered, and the trade secret aspects of these assets.

A large focus will be given to the international trend that is growing to strengthen trade secret law. There are new laws and others being promoted in the U.S., in Europe, and even in China that portend the rising importance of trade secrets in the global economy. It is almost a given, even for small paint companies, that a world economic view is the only view to have. Given that, we proceed at peril if we do not have a grasp of international trade secret law. Several “episodes” of iPaint will be devoted to this crucial topic. Any stories from the trenches that you think may help edify this topic would be most appreciated.

In previous last-season episodes (arti-
cles), we spent lots of time discussing the
chiefly state-by-state development of the
tort of trade secret misappropriation. In
some of our future articles, we will turn
our attention to federal trade secret laws
with some real teeth in them. We will ad-
dress the first federal law to directly and
broadly address the protection of trade
secrets, the 1996 Economic Espionage
Act that created criminal penalties (in-
cluding imprisonment) for theft of trade
secrets. More recently, we will note
that Congress passed the Theft of Trade
Secrets Clarification Act of 2012 to clar-
ify the scope of the Economic Espionage
Act in response to the decision of the U.S.
Court of Appeals that overturned the
conviction of a former Goldman Sachs
employee who stole proprietary com-
puter source code. Congress amended
the Economic Espionage Act to cover
products or services used in interstate or
foreign commerce. We will also explore
the interactions of other laws that are be-
ing discussed at the federal level that will
expand the scope of the Act even further.
Keeping our world-economic-view
glasses on, we will discuss how trade se-
cret law in the European Union is primar-
ily controlled by its member states. The
EU has recently taken major steps toward
the creation of a unified system for the
protection of trade secrets. We will ex-
plore some of the impacts of this unifi-
cation on companies selling coatings into
the European Union.
No trade secret analysis is complete
without considering China of course, as
the world’s hottest economy, a huge mar-
ket for coatings and coatings innovations,
and a historically trade secret high-risk
jurisdiction. In 2011, Treasury Secretary
Geithner went so far as to accuse China of
enabling the “systematic stealing of intel-
lectual property of American companies”
and this was more recently reiterated by
Gary Locke, U.S. Chinese Ambassador.
We have previously discussed coat-
ings cases involving theft of coatings
technologies by Chinese entities. But, it is
a rapidly changing scene and requires us
to keep an ear to the Great Wall.
A dialogue will be opened regard-
ing why U.S. companies suffering from
industrial espionage have recently cho-
sen to file complaints with the U.S.
International Trade Commission (ITC),
and discuss the advantages and disadvan-
tages the ITC offers as a judicial arbiter
for coatings companies. Being able to lit-
erally stop importation of foreign prod-
ucts embodying a misappropriated U.S.
company trade secret ain’t a bad option.
We will continue our in depth-look at
the “paper wall” surrounding trade secret
assets. We will be looking at provisions
that should be incorporated into trade-
secret licenses, technical assistance agree-
ments, and hybrid patent/trade-secret
licenses. These provisions include clauses
that spell out license grants, royalty pay-
ments, indemnities, warranties, terms
and termination conditions, etc. Hybrid
agreements, and the problems they create
will be discussed. Since it is a misuse of
a patent or an antitrust violation to exact
royalty payments after a patent ceases to
be in force, we will explore solutions to
this predicament.
So there’s your episode trailer for the
year upcoming. Oh, that Walter White
were still around to love and loathe. But,
in his absence, I remain,
Yours Very Truly,
McDaniel, aka Heisenberg. CW

“The iPaint team gives a sneak peak at upcoming episdie topics: we will continue the predominant focus on trade secret topics and will expand this to include copyright and trade secret syntergies...a large focus will be given to the international trend that is growing to strengthen trade secret law.”