Choosing the Scope of Trade Secret Law when Secrets Complement Patents

Posted: 26 Jan 2010 Last revised: 15 May 2014

See all articles by Elisabetta Ottoz

Elisabetta Ottoz

University of Turin - Department of Economics

Franco Cugno

University of Turin

Abstract

We present a model where an incumbent firm has a proprietary product whose technology consists of at least two components, one of which is patented while the other is kept secret. At the patent expiration date, an entrant firm will enter the market on the same footing as the incumbent if it is successful in duplicating, at certain costs, the secret component of the incumbent’s technology. Otherwise, it will enter the market with a production cost disadvantage. We show that under some conditions a broad scope of trade secret law is socially beneficial despite the innovator is over-rewarded.

Keywords: Knowledge Spillovers, Duplication Costs, covenants not to compete, inevitable disclosure

JEL Classification: O31, O32

Suggested Citation

Ottoz, Elisabetta and Cugno, Franco, Choosing the Scope of Trade Secret Law when Secrets Complement Patents. International Review of Law and Economics, Vol. 31, pp. 219– 227, 2011, Available at SSRN: https://ssrn.com/abstract=1542700

Elisabetta Ottoz (Contact Author)

University of Turin - Department of Economics ( email )

Via Po, 53
Torino, 10124
Italy
+390116702739 (Phone)
+390116702762 (Fax)

Franco Cugno

University of Turin ( email )

Via Po 53
Torino, Turin - Piedmont 10100
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
623
PlumX Metrics