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Hastings Law Journal

Abstract

Trade secret defendants sometimes raise First Amendment defenses to trade secret misappropriation claims. Some commentators believe that the First Amendment defenses should never be given credence in trade secret cases because trade secrets are property rights and there is no First Amendment right to violate property rights, a theory which the California Supreme Court arguably adopted in DVD Copy Control Association v. Bunner. Other commentators assert that preliminary injunctions in informational trade secret cases should be considered prior restraints on speech, which bear a heavy presumption of unconstitutionality.

This Article asserts that preliminary injunctions in ordinary trade secret cases generally do not raise First Amendment concerns. The prior restraints doctrine ought, however, to be applied in cases in which third parties obtain non-public information without participating in any wrongdoing and decide to disclose it to the public to enhance public discourse. Insofar as the California Supreme Court decision in Bunner seemed to hold otherwise, its reasoning is flawed. The Article also discusses rare cases in which even direct misappropriators of trade secrets might succeed with First Amendment defenses in trade secret cases. It also considers a number of other First Amendment due process issues, such as whether the burden of proof in third party disclosure cases should be higher than in normal trade secret cases and whether appellate review of constitutionally relevant facts should be de novo when First Amendment defenses have been raised. The Article offers a set of consistent principles that should be applied in trade secret cases involving informational trade secrets.

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