Unit 5- Trade Secrets and Conflict of Interest

Question 1

Trade Secret

Answer 1

consist of any formula, pattern, device or compilation of information which is used in one’s business, ang gives advantage over competitors who do not know or use it

Question 2

What info qualifies as a trade secret?

Answer 2

Info that provides competitive advantage, potential to make money (commercial value), and should be kept confidential(secret).

Question 2

List all four types of information in a trade secret (including commercial information).

Answer 2

1. Financial Information
2. Technical & scientific Information
3. Commercial Information
4. Negative Information

Question 3

Examples of Technical and Scientific Information

Answer 3

• Product info: composition,design, data on product performance
• Manufacture Info: Specialized machinery, production costs, man. methods
• Know how to do a particular operation

Question 4

Examples of Commercial Info

Answer 4

Customer Lists
Business plans and Strategies
Info re new business opportunities

Question 5

Examples of Financial Info

Answer 5

Cost & Pricing Info

Salary and Compensation plans

Question 6

True or False- Ownership of a trade secret does not confer a right of exclusive use.​ It is a right to not have the secret ​misused or wrongfully acquired by others. ​Once the information is widely known, it ceases to be a protectable trade secret.​

Answer 6

True

Question 7

What are non-competition Agreements?

Answer 7

Restrict an employee from working for a competitor after leaving a company

Question 8

Confidentiality Agreements

Answer 8

An explicit contractual obligation of confidentiality- secrecy

Question 9

What is a non-disclosure agreement?

Answer 9

A binding contract that requires an individual or company, known as the “Recipient”, to withhold confidential information from being released to any 3rd party or becoming public.

Question 10

What is the Economic Espionage Act of 1996?

Answer 10

Made the theft of trade secrets a federal offence​

Intended to prevent the theft of trade secrets for the benefit of foreign governments​

Question 11

What are the three major arguments for Trade secret protection?

Answer 11

• Trade secrets as a kind of property
• Fair Competition
• Confidentiality Argument (Based on Agency Relationship)

Question 12

Trade Secret as Property Argument

Answer 12

Trade secrets in law are seen as one’s intellectual property (like copyright, trademarks and patents) and therefore property rights laws should be applied to protect them. It doesn’t mean it will be kept secret, but that others cannot misuse it or wrongfully acquire it.

Question 13

Fair competition Argument

Answer 13

Companies have an unfair competitive advantage if they can use for free information and processes that other companies put resources and money in developing. Even if the info is not easily classifiable as property (eg. ) it may still be protected on the grounds of Fair Trade.

Question 14

The Confidentiality Argument

Answer 14

Employees who disclose trade secrets to others or use them themselves are guilty of violating confidentiality. This argument is based on the fact that employees agree to become agents on employments and are therefore obligated to keep certain formation secret. This obligation also continues when the employee moves to another company.

Question 15

Competitor Intelligence- Info gathered by Competitors. Ethical Methods are:

Answer 15

Brochures, website, social media

Question 16

Unethical Methods of Data Collection

Answer 16

Theft and Receipt of Unsolicited Information

Covert surveillance- encourage employees to leak info to the public, set up listening devices, espionage- Spying

Misrepresentation: gain info under false pretence- pretend to be a customer for products (in Kdrama She doesn’t have to know). Customer service companies do this to gauge customer treatment

Improper influence-(coercing, force, bribery)

Question 17

Conflict of Interest

Answer 17

When personal interest interferes with the interest of one’s role- leading to violate their obligation to someone else

Question 18

Actual C of I vs Potential C of I

Answer 18

Actual c of I occurs when you really do the action that satisfies your personal interest.
Potential c of I refers to the potential that c of I will occur

Question 19

Four Kinds of Conflicts of Interest

Answer 19

Exercising biased judgment​- make decisions to get results that suit their interests- Like the judge in Vincenzo

Engaging in direct competition​- Employee engages in acts that place himself as a competitor to his/her company. (Whether through internal corruption or forming a business, giving trade secrets to competitors

Misusing a position ​- Using your powers for personal gain- Official in Hwarang

Violating confidentiality​- Using confidential information for personal gain-

Question 20

Give 4 ways in which to manage conflict of Interest

Answer 20

1. Commitment to objectivity
2. Avoidance- Avoid acquiring any interests that would interfere with serving others
3. Disclosure- Gives person likely to be harmed a heads up, and they can remove themselves out of danger or be alert
4. Independent Judgement- Using an unbiased
   third-party