The Relief To Threatened Misappropriation Of Trade Secret In USA And The Inspiration To Chinese Trade Secret Law

As the competition becoming stronger and stronger, the employee leaves acompany from whom he or she gained knowledge of the company’s trade secrets, thatemployee may use or disclose those trade secrets for the higher position or salary.Such activities as founding their own business or working for the competitor arecalled “Threatened Misappropriation” in American Trade Secret Case Law. Currently,there is no injection of the concept of Threatened Misappropriation in Chinese TradeSecret law, the relevant relief is not developed satisfactorily, either. The inherentconflicts among employers or companies who want to protect their trade secrets,employees who want to move freely among companies and new jobs and the publicpolicy of employee mobility are highlighted. More companies choose to sign“nondisclosure agreement” or “Not compete agreement” to avoid the improper use ordisclosure, which cannot avoid the actual misappropriation and subsequent detriment.In USA, the nondisclosure agreements are generally the necessary part of theemployment contract. The Common Law also creates a liability between employersand their employees. However, the situation of Inevitable Disclosure cannot beavoided because of the stronger competition. Choice is not definite when employeemust choose from economic benefits, pressure from competition and the liability forbreach of contract. The trade secret law in USA place high importance on the employment mobility and subsequent social affection. Therefore, even if not competeagreement can avoid threatened misappropriation effectively, it is not supported bythe courts in several states.The doctrine of inevitable disclosure was established to protect trade secret of theformer employer and avoid misappropriation in Eastman Kodak Co. V. Power FilmProducts, Inc. in1919. Without judicial or additional legislative clarification, themeaning of the term “threatened misappropriation” is ambiguous. Different fromactual misappropriation, as is always the case with injunctive relief under threatenedmisappropriation, there must be a high degree of probability of inevitable andimmediate use of trade secrets, detriment has not occurred. Therefore, the owner oftrade secrets can just claim for the injunctive relief instead of damages. There are somany differences of market environment, business code and trade secret law systemin China and U.S.A., therefore, while applying this doctrine, we must analyze theinterest of various market parts and the public policy to apply it alternatively for thehealthy development of the market and society.There are totally six parts in this comment. After explicit discussion, this commentargue that there is certain defectiveness in Chinese trade secret law system, andsuggest to draw the concept of threatened misappropriation into current law systemand adopt the doctrine of inevitable disclosure selectively through some techniquemethods such as multi-factor test to determine the probability of inevitable disclosurebased on Chinese specific market circumstance and relevant public policy.