Unit 5- Trade Secrets and Conflict of Interest Flashcards
Trade Secret
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
What info qualifies as a trade secret?
Info that provides competitive advantage, potential to make money (commercial value), and should be kept confidential(secret).
List all four types of information in a trade secret (including commercial information).
- Financial Information
- Technical & scientific Information
- Commercial Information
- Negative Information
Examples of Technical and Scientific Information
- Product info: composition,design, data on product performance
- Manufacture Info: Specialized machinery, production costs, man. methods
- Know how to do a particular operation
Examples of Commercial Info
Customer Lists
Business plans and Strategies
Info re new business opportunities
Examples of Financial Info
Cost & Pricing Info
Salary and Compensation plans
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.
True
What are non-competition Agreements?
Restrict an employee from working for a competitor after leaving a company
Confidentiality Agreements
An explicit contractual obligation of confidentiality- secrecy
What is a non-disclosure agreement?
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.
What is the Economic Espionage Act of 1996?
Made the theft of trade secrets a federal offence
Intended to prevent the theft of trade secrets for the benefit of foreign governments
What are the three major arguments for Trade secret protection?
- Trade secrets as a kind of property
- Fair Competition
- Confidentiality Argument (Based on Agency Relationship)
Trade Secret as Property Argument
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.
Fair competition Argument
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.
The Confidentiality Argument
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.
Competitor Intelligence- Info gathered by Competitors. Ethical Methods are:
Brochures, website, social media
Unethical Methods of Data Collection
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)
Conflict of Interest
When personal interest interferes with the interest of one’s role- leading to violate their obligation to someone else
Actual C of I vs Potential C of I
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
Four Kinds of Conflicts of Interest
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-
Give 4 ways in which to manage conflict of Interest
- Commitment to objectivity
- Avoidance- Avoid acquiring any interests that would interfere with serving others
- Disclosure- Gives person likely to be harmed a heads up, and they can remove themselves out of danger or be alert
- Independent Judgement- Using an unbiased
third-party
