Trade secrecy in a knowledge-based economy

grantor: University of TorontoKnowledge production and distribution are increasingly recognized as key determinants of economic growth in what has come to be known as the "knowledge-based economy". Trade secrecy law confronts the tension between allowing skilled employees in high technology industry to freely utilize their knowledge, while at the same time protecting their former employers' investments in innovation. This thesis reviews the efficiency of trade secrecy law in the employment context in England and Canada. Some comparative perspective is added by an overview of United States law. An economic framework is developed to support the retention of trade secrecy protection. Special consideration is given to the objectives and insights of endogenous growth theory. Existing law is justified by the provision of incentives to innovate and the reduction of transaction costs associated with the protection, misappropriation and exchange of information. However, some modification to existing doctrine is suggested. In particular, this thesis advocates a shift in remedial focus from undivided property rules and injunctive relief, to liability rules and monetary relief. These shifts in focus ensure that constraints on the productive use of information and knowledge that are imposed in the employment context are limited to safeguarding incentives to innovate and do not unnecessarily stifle technological change and innovative growth.LL.M