Even though trade secret rights are governed today almost entirely by statute (the Uniform Trade Secrets Act (UTSA) in every state except New York, and the federal Defend Trade Secrets Act [DTSA]), its operative principles are rooted in common law traditions of tort and the twin policy objectives of “maintenance of standards of commercial ethics and the encouragement of invention.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481 (1974). Therefore, the Restatement (of Torts, from 1939, and of Unfair Competition, from 1995) can hold sway with courts even when they are engaged in statutory interpretation. For a quick review of how the law has developed through individual cases, take a look at my article, “Brief History.”
Here is a selection of those decisions, along with other resources, which have come out during (approximately) the past year and which I believe provide helpful guideposts about important aspects of trade secret law and practice.
Inspired by the Patent Case Management Judicial Guide, the Trade Secret Case Management Judicial Guide, was published in 2023 by the Federal Judicial Center and has now been distributed to all federal courts, providing judges and counsel with a comprehensive resource for managing trade secret litigation. Chapters are organized according to the stages of litigation and guided by an early case management checklist. The Guide has been cited and applied in a growing number of cases, encouraging a process of harmonization that is also driven by federal standards under the DTSA.
Counsel should also consider the efforts of The Sedona Conference Working Group 12 on Trade Secrets, a volunteer think tank of over 200 judges, attorneys and other professionals who have produced a series of commentaries representing consensus views on various aspects of intellectual property litigation. Because courts routinely cite to the Sedona Commentaries as authoritative, they represent a valuable resource. In addition to its existing publications, the organization is soliciting ideas for new commentaries on international trade secret enforcement, incident response plans, and issues affecting departing employees.
Most trade secrets are not absolutely secret, because modern business requires that they be shared with employees, vendors and other partners. Therefore, the issue is more about maintaining control over the information to keep it from becoming generally known. One of the more challenging, persistent questions is how to treat “compilations” of information, some aspects of which may be in the public domain, while the entirety of the combination remains unknown. The UTSA and the DTSA each include “compilation” in the non-exhaustive types of information that can be covered; and the Restatement (Third) of Unfair Competition, § 39, comment f teaches that even where individual elements are well known, a “secret combination, compilation, or integration” of those elements can qualify. This concept was elaborated in Allstate Ins. Co. v. Ameriprise Fin. Servs., 2023 U.S. Dist. Lexis144791 at *48 (N.D. Ill. Aug. 18, 2023), where the court analogized a combination secret to a recipe using known ingredients, since the “secret lies in how it all comes together – what to mix in, when, and how much;” and to a collection of Easter eggs, where individual eggs may not be protectable, but a “basketful” may be – “especially from a competitor hoping to avoid the hunt.”
Closely related to the concept of secrecy is the requirement that the trade secret owner exercise “reasonable efforts” (UTSA) or “reasonable measures” (DTSA) to protect the information. In effect, courts will not step in to help if the owner has failed to help itself with security measures that match the business risk. Occasionally, the failure is so obvious that it can result in summary judgment. For example, consider Jacam Chem. Co. v. Shepard, 101 F.4th 954, 965-966 (8th Cir. 2024), where the plaintiff had failed to designate materials as required under the parties’ contract, and there was no proof of an alleged “implied obligation within the industry to keep information secret.” See also Analog Technologies v. Analog Devices, 105 F.4th 13, 19 (1st Cir. 2024), where the license agreement’s time period for confidentiality had expired, leaving the defendant free to use the information.
On the other hand, the issue of whether the plaintiff’s efforts were “reasonable under the circumstances” is a fact question for the jury; therefore, in a case where the trade secret owner was a small company with basic access controls for its facility and its computer system, summary judgment was denied even though documents were not marked and the company had no security policies, no training, and no exit interviews. Consol. Indus. v. Maupin, 2023 U.S. Dist. Lexis 199032 at *26 (W.D. Tenn. Nov. 6, 2023). Finally, consider that some courts addressing the reasonable measures issue base their analysis on a short list of factors derived from the pre-UTSA common law (contractual restrictions, nature and extent of precautions, circumstances of disclosure, and degree of public disclosure.) See Koch Acton v. Koller, 2024 U.S. Dist. Lexis 44137 at *23 (W.D. Tenn. Mar. 13, 2024.
The DTSA as enacted by Congress did not contain any specific provision for extraterritorial application. But it did express strong congressional interest in curbing foreign theft of trade secrets. And since it was codified as part of the Economic Espionage Act of 1996, 18 U.S.C. §§ 1830-1839, plaintiffs could potentially rely on that law’s extraterritoriality provision in § 1837. But that section was expressed in typically criminal terms, with references to the “offender” and an “act in furtherance of the offence.” No matter, said the District Court in Motorola v. Hytera, 436 F.Supp.3d 1150 (N.D. Ill. 2020), ruling that the statute did apply where at least one act in furtherance of the misappropriation occurred in the United States That ruling was affirmed in Motorola v. Hytera, 108 F.4th 458, 487-488 (7th Cir. 2024), and its effect was reinforced in Beijing Meishe v. TikTok, 2024 U.S. Dist. Lexis 130213 at *34 (N.D. Cal. July 23, 2024), where the court held that an “act in furtherance” can consist of use in the United States, even when the misappropriation happened entirely outside the country.
One of the unique aspects of trade secret law, relative to other forms of intellectual property, is that the boundaries of the right are not specified in a government-issued grant. As a result, a preliminary – and usually consequential – question in every trade secret case is: what exactly is the information that’s being claimed as a trade secret? Often companies don’t maintain a thorough inventory of their information assets, and even if they have, the specific data involved in any given dispute is unlikely to have been described with precision before litigation begins. As a result, identification of the subject matter – and when and how to do it – has become a frequent early battleground in trade secret litigation.
While a general consensus has formed that categorical descriptions are sufficient for publicly-filed pleadings, the level of precision required to set the bounds of discovery, and later to prevail on a motion for summary judgment, can seem idiosyncratic. But the variations in outcomes can reveal opportunities for the plaintiff to draft its descriptions in ways that meet the reasonable expectations of most courts. For example, in Ho-Ho-Kus v. Shucharski, 2023 U.S. Dist. Lexis 201393 at *18 (D.N.J. Nov. 9, 2023), the court noted that “properly demarcated lists of categories of information meet the pleading standard [which is] one of notice, not of detail . . . . particularly if these lists are linked to the circumstances by which the information is stolen . . . .” See also Beijing Meishe v. TikTok, 2024 U.S. Dist. Lexis 130213 at *37 (N.D. Cal. July 23, 2024), approving of the complaint’s reference to “voluminous” source code listings contained in two specific documents.
The question of whether secrets are adequately described can in theory be revisited at any point in the litigation. For an extreme example of this risk, consider Zunum Aero v. Boeing, 2024 U.S. Dist. Lexis 144978 at *45-46 (W.D. Wash. Aug. 14, 2024), vacating a jury award based on insufficient identification, even though the plaintiff’s description had been approved for purposes of discovery and at summary judgment.
“Misappropriation” has to be defined broadly, in order to capture the myriad ways in which a plaintiff’s exclusive control over its sensitive information can be compromised. Therefore, the DTSA and UTSA extend to behaviors such as acquisition by “improper means,” violation of a duty of confidence, and misuse of information disclosed for a limited purpose. And “use” does not have to be comprehensive or direct; as the Restatement (Third) of Unfair Competition § 40, comment c instructs, “any exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant is a ‘use’. . . .”
This generous meaning of “use” can be vexing to defendants who are accused of misappropriating a “combination” or “compilation” trade secret, which as noted above can include elements that are generally known. While it may not be possible to assert such a combination in which the only act of misappropriation pertains to an element in the public domain, liability can attach to a defendant who merely uses the secret compilation as a reference in pursuing its own development. Crabar/Gbf, Inc. v. Wright, 2023 U.S. Dist. Lexis 976 at *14 (D. Neb. Sep. 19, 2023).
In an era of digital communications, ubiquitous storage options, and remote work, there are bound to be opportunities for misappropriation, or what looks like misappropriation, by departing employees who abscond with information they were supposed to use only in their jobs. Generally speaking, employees who merely “retain” such information will not be liable. However, if an employee in anticipation of an imminent departure downloads a large amount of confidential information, that behavior – particularly if the employee removes it from the workplace – can constitute “acquisition by improper means,” since the information has been moved to an insecure location. Allergan v. Revance, 2024 U.S. Dist. Lexis 976 at *22-23 (M.D. Tenn. Jan. 3, 2024). Another example of improper acquisition arises when a public-facing website is scraped through deception, to discover the logic hidden behind it. Compulife Software v. Newman, 111 F.4th 1147, 1162-1163 (11th Cir. 2024).
Sometimes defendants make it easy to establish misappropriation, by deliberate spoliation of relevant evidence. See Ecolab v. Anthony Ridley, 2024 U.S. Dist. Lexis 94904 at *42-44 (E.D. Tenn. Mar. 12, 2024) (individual employee and new employer wiped devices).
Assuming trade secret misappropriation has occurred or is threatened, the question becomes what to do about it. In many cases, the urgency of avoiding continuing damage leads the plaintiff to request a preliminary injunction. But because that remedy is “extraordinary,” the requirements can be difficult to meet. One of those requirements is that the harm be proven “irreparable,” and when the plaintiff fails to point to “concrete evidence” showing that monetary relief would be insufficient, it is proper to deny the request. Tribal Sols. v. Valandra, 2023 U.S. App. Lexis 29539 at *7 (5th Cir. Nov. 6, 2023). Indeed, the requirements for this remedy are so exacting that a trial court’s failure to provide a robust analysis of the evidence can lead to reversal on appeal. Insulet Corp. v. EOFlow, 104 F.4th 873, 881 (2024). Relatedly, it may be appropriate to deny a permanent injunction for lack of proof following trial in which the jury has awarded significant damages, as in trade secret law there is no presumption of irreparable harm. Versata Software v. Ford Motor Co., 2023 U.S. Dist. Lexis 188219 at *11 (E.D. Mich. Oct. 19, 2023).
Where a jury finds that misappropriation has occurred but declines to award damages because the plaintiff has not suffered harm, the court may grant a permanent injunction and also award fees to the plaintiff, because harm to the trade secret owner is not an element of the claim. Applied Medical Distribution v. Jarrells, 100 Cal.App. 5th 566, 570 (Cal.App. 2024) (applying California version of the UTSA).
Because trade secret law has traditionally been viewed through a tort lens, the tendency is to be “flexible and creative” in fashioning monetary remedies. However, damage claims must be based on admissible evidence and reliable analysis, so summary judgment may be entered where the plaintiff’s lost profits theory is based on “two layers of speculation.” TransPerfect v. Lionbridge, 2024 U.S. App. Lexis 1053 at *9-10 (2nd Cir. Jan. 17, 2024) (unpublished).
As with all other elements necessary to the claim, the burden of proof on damages remains with the plaintiff throughout, and that includes proximate causation, such as that the defendant’s sales were “attributable to the trade secrets;” therefore it is improper to require the defendant to demonstrate what portion of its proven sales were not so attributable. Pegasystems v. Appian, 2024 Va.App. Lexis 438 at *54-56 (Va. July 30, 2024).
A different kind of apportionment was the focus of Echospan v. Medallia, 2024 U.S. Dist. Lexis 127259 at *23-25 (N.D. Cal. July 2, 2024), where the plaintiff’s asserted multiple trade secrets but failed to apportion its damage claim among them. Therefore, when the jury found misappropriation as to only some of the enumerated secrets, the resulting verdict was set aside as without foundation. This case illustrates a basic tension between the imperative to identify alleged secrets with particularity and the need to provide a rational path to a verdict when only some have been misappropriated.
It may not surprise the reader to learn that the World Intellectual Property Organization (WIPO) offers a major resource about trade secret law and management. But this new online “WIPO Guide to Trade Secrets and Innovation”—introduced this past summer—was a long time coming. In part this lag was due to the agency’s primary mission, which is to implement and manage international treaties affecting registered IP rights: patents, copyrights, trademarks and designs. In many corners of the IP community, trade secrets don’t even qualify as “intellectual property,” in spite of the TRIPS Agreement, which declares otherwise and requires all member states (through Article 39) to provide enforcement of rights in “undisclosed information.”
When I arrived at WIPO in late 2009, I learned more about why trade secrets had received so little attention relative to the rest of the IP landscape. Why didn’t we have robust programs dealing with this obviously important asset? In the first place, I was told, the diplomats in Geneva didn’t really understand what trade secrets were, but they presumed that secrecy must conflict with the notion of transparency in government, a principle which they all valued, at least in the abstract. Second, to the extent that anyone knew what trade secrets were, they thought immediately of Article 39(3) of TRIPS, which was designed to protect clinical data owned by drug companies, an industry that unfortunately many loved to hate.
I learned that this negative view was reinforced by another misunderstanding, that trade secrets encouraged and enabled hoarding of knowledge. That the opposite was true seemed confounding to many, until of course one considered how tech transfer works, and how sharing in an information-based economy is made safe only by the existence of legal frameworks to enforce expectations of confidentiality. In spite of the confusion and wrong assumptions, it seemed clear to anyone engaged in business that secrets were important. After all, the promised “knowledge transfer” to the developing world that had been promoted as the payoff for agreeing to TRIPS hadn’t materialized. Even though everyone could read published patents, without the relevant know-how it was often impossible to build the infrastructure to practice the patented inventions. So this was the conundrum: trade secrets seemed to be both essential and mysterious at the same time.
It wasn’t that the subject was entirely ignored. We had a division focused on helping small and medium enterprises (SMEs), universities and research institutions with practical application of IP, and trade secret education was a part of that effort. But it wasn’t in the spotlight. That started to change in 2016, following a wave of attention from the business community reflected in the near-simultaneous passage in the U.S. of the Defend Trade Secrets Act and the EU’s issuance of its Trade Secrets Directive. In 2019 WIPO sponsored a Symposium on Trade Secrets and Innovation, an event that was repeated in 2022. Along the way, it published articles promoting secrecy as an intellectual property right and explaining why trade secrets are the most popular form of IP protection for SMEs.
The symposia were designed and carried out under the leadership of Tomoko Miyamoto, Head of the Patent Law Section at WIPO, whose keen interest in trade secrets was the primary force behind those events. When the idea for publishing a comprehensive treatise emerged in 2022, she also led that project. It bears emphasis, however, that the finished work, like many WIPO publications, was authored by many individuals from all around the globe. This approach has the advantage of bringing multiple points of view and experience to a multinational resource; but it also creates a serious editorial burden, finding ways to harmonize forms of expression while retaining helpful comparisons among jurisdictional frameworks of individual countries. I had the privilege of working with Tomoko to bring the final version to print, and it was released in June 2024.
As the title suggests, this 145-page (plus appendices) volume is intended to “guide” the reader. A great deal of effort went in to making it accessible as well as comprehensive, to meet the needs of two major constituencies: (1) businesses, particularly SMEs, and (2) policymakers in a position to influence the development of legal frameworks, particularly in developing countries. Of course, WIPO also intends the Guide to be educational, providing the public with easy-to understand explanations and examples. It is practical, not academic, designed to meet the varied needs of the small shop owner, the fast-growing online business, as well as the established company seeking cross-border collaborations. Therefore, it can be a valuable resource for any organization anywhere in the world, providing insights and tips, presented in a global context not present in most other reference works.
The Guide is organized logically, beginning (after the introduction) with the strategic role of trade secrets in an information-based economy. Recognizing that the idea may seem counterintuitive, the Guide emphasizes that secrecy enables the sharing and dissemination of information, by providing enforceable guarantees of confidentiality and trust. And because certain types of innovations are not suitable for patent protection (for example, process technology deployed in private where infringement cannot be detected), the public interest in trade secret enforcement aligns with the patent system, as each encourages innovation in different ways. We can only hope that this sort of clarification will help to overcome the widespread suspicion of trade secret laws and lead to meaningful efforts to harmonize global frameworks.
The next section (Part III) provides a primer on trade secrets, including a basic definition “in 150 words,” a description of the kinds of information that can qualify for protection, and the common elements of most countries’ laws and procedures for enforcement. Similar to WIPO’s treatment of other forms of IP, the Guide includes a section on “exceptions and limitations” to the right (for example, whistleblowers). It also includes a discussion contrasting patents and secrets, while emphasizing that commercialization of innovation usually relies on both forms of protection pursued through a complementary strategy.
One of the most practical and useful sections (Part IV) addresses management of trade secret assets, directed at the twin goals of preventing loss and proving that the owner took “reasonable steps” (an element of the TRIPS formulation) to protect the integrity of its secrets. The Guide includes instructions on how to identify and assess secrets and related risks, as well as how to design and implement a trade secret protection program. It focuses not only on preservation of assets but also on how to deploy them in the business to increase enterprise value. Defensive strategies are also included, directed at avoiding contamination, for example in hiring high-level talent from competitors, or controlling exposure in the course of third-party relationships.
Part V deals with litigation, including investigations, offensive and defensive strategies, and finding ways to resolve disputes that are often driven by emotions. The Guide surveys various remedies (including extraterritorial reach), and deals with ways in which judges can maintain the secrecy of information that has to be submitted as part of court proceedings. Although not all jurisdictions allow criminal prosecution for trade secret theft, given the risks involved in cross-border transactions, the discussion of criminal exposure is clearly helpful.
As if to drive home the point that trade secret laws encourage knowledge-sharing in the pursuit of innovation, the Guide includes an extensive discussion of collaborations. The commercial aspects are described through the timeline of most relationships, beginning with establishing contracts and trust, through management of the development process, and eventually sorting out the resulting rights. A similar but distinctive treatment is given to academic collaborations.
Finally, the Guide takes a look at special issues involving the increasingly critical asset class represented by “digital data” in its various forms, including raw data, analytics and code. For many companies whose business model has been transformed by the value of data they collect in the ordinary course, this section (VII) will be illuminating and helpful.
It hasn’t been that long since trade secrets were barely whispered about at WIPO. With the WIPO Guide to Trade Secrets and Innovation, the organization has made a major contribution to completing the “IP stack” of modern business.
Such hostile rhetoric and initiatives is not welcomed by those watching US-China IP issues closely. “Getting increased harmonisation of trade secret laws usually depends not just on bargaining as happened with the Phase One agreement with China, but is also usually grounded in an environment that values global free trade,” says seasoned Silicon Valley trial lawyer and international trade secret expert James Pooley. His concern, therefore, is that as the America retreats “more and more from free trade and globalisation” opportunities will be lost to influence the improvement of trade secret protection in other countries, including in China.
And for Pooley, China stands out for many reasons. “At the moment it has decided to pull back from publishing most court decisions, so that lack of transparency leaves us uninformed about how the enforcement system is working, and therefore in a difficult spot when trying to engage in diplomacy about improvements,” he explains.
Pooley spent 10 days in China earlier this year meeting with various academics, businesspeople and government officials, talking about the new edition of his book Trade Secrets (Intellectual Property) which has been translated into Mandarin. His impression is that, overall, China is “quite aware of and interested in” improving its trade secret protection frameworks, “for the obvious reason” that it will help move the economy forward.
“But I suspect that, given current political realities, the Chinese will be doing that more on their own, rather than in conversation and collaboration with the US,” says Pooley. “So I worry about the consequences of not having the chance for meaningful, continuous engagement with China regarding trade secret enforcement.”
Below you can watch the replay of the December 11th, 2024 LinkedIn Live event presented by Tangibly. In this presentation, titled "What Actually Happens in Trade Secret Litigation", trade secrets expert Jim Pooley joined a panel of experts to discuss insights and strategies regarding trade secret litigation.
The panel included Seth Garber (Partner, Morgan Lewis), Ben Herbert (Partner, Miller Barondess), and Tim Londergan (CEO/Co-Founder, Tangibly).
The Big Apple’s reliance on trade secrets ‘common law’—and some surprising rulings in its courts—have left it an unfavourable choice for claimants, says James Pooley.
Most people see New York as a global leader in finance and business. Much less known—except perhaps among trade secret lawyers—is the state’s reputation as an outlier, anchored in outmoded jurisprudence.
The model Uniform Trade Secrets Act (UTSA) was first released in 1979, with an updated version in 1985. But New York stands alone among the states in refusing so far to adopt the statute. Instead, it continues to rely on the ‘common law’ of trade secrets as described in the 1939 Restatement of Torts §§ 757–759, a cramped summary that requires information to be ‘in continuous use’ in the business and that doesn’t apply to so-called ‘negative secrets’, such as experiments showing what doesn’t work, or ‘ephemeral events’ such as secret bids, unannounced products, or financial information.
The US Supreme Court has identified two policies supporting the common law of trade secrets: the “maintenance of standards of commercial ethics and the encouragement of invention”. Kewanee Oil v Bicron, 416 US 470, 481 (1974).
The first principle focuses on preventing bad behaviour, and it informed a general consensus among common law courts that damage awards should not only compensate the plaintiff for the defendant’s bad acts but also provide a disincentive for those who might be inclined to misappropriate.
As a result, calculation of damages has traditionally included not only harm to the plaintiff but also any ‘unjust enrichment’ enjoyed by the defendant. In effect, trade secret damage awards have always been intentionally generous, directed at deterrence as well as full compensation.
This double-tracked approach to remedies has since been codified in statutes, first in the UTSA, and then in 2016 with the passage of the federal Defend Trade Secrets Act (DTSA). Both of these laws use exactly the same damage measure, expressed in the conjunctive: a plaintiff may recover for its “actual loss . . . and damages for any unjust enrichment” so long as there is no double counting.
Typically, the unjust enrichment has been calculated by referring to the plaintiff’s cost to develop the trade secret, and this ‘avoided cost’ theory has become very popular among plaintiffs, who usually find it difficult to prove actual damages from misappropriation.
New York courts ‘less hospitable’
But the US operates as a federal system, and interpretation of each state’s law is controlled by its own courts. As already noted, New York remains rooted in a narrow representation of the common law. Even so, it surprised many when in 2018 the highest court of New York held that a defendant’s avoided costs may not be awarded to a plaintiff unless there is proof of a “causal relation . . . between the gains of the aggressor and those diverted from his or her victim”. EJ Brooks v Cambridge Sec Seals, 31 NY3d 441 (NY 2018).
In other words, actual loss and unjust enrichment were linked in a way that made it hard to establish the latter without proving the former. Given the inherent difficulty of proving any direct harm from misappropriation, with this new rule New York state courts suddenly became much less hospitable to trade secret claimants.
Unsurprisingly, following the EJ Brooks decision, New York plaintiffs filed mainly in federal court, asserting the DTSA (with its presumably clear and reliable damage guidelines) while avoiding any claims based on New York common law. And because federal courts of appeals in six of the 12 regional circuits had ruled that the UTSA damage provisions allow recovery of avoided development costs independently of any proof of harm to the plaintiff, it was generally accepted that all federal courts would interpret the same language of the DTSA in the same way.
That assumption was upended by the opinion in Syntel Sterling v Trizetto, 68 F4th 792 (2nd Cir 2023), in which the Second Circuit Court of Appeals—importantly, the one that sits in New York—reversed a jury award of $285 million against Syntel, a competitor of Trizetto who used stolen secrets to divert business from a common customer.
Departing from the rulings in the earlier UTSA cases, the Second Circuit held that any claim for unjust enrichment damages must take into account the nature and extent of the direct harm to the plaintiff. In this case, the judges pointed out, Trizetto had lost profits only for the one customer (amounting to $8.5 million), and the trial court had entered a permanent injunction that prohibited any further use of the purloined information.
As a result, the court reasoned, Trizetto still had control over its trade secrets, and the avoided cost award (which represented about half of what it had cost Trizetto to develop the information) appeared in effect to be punitive rather than compensatory.
To get to this result, the Court of Appeals rejected the reasoning of the other courts that had construed the identical damage framework from the UTSA. It did not directly confront the fact that the plain language of the DTSA and UTSA allowed the plaintiff to recover for any harm to itself ‘and’ any benefit conferred on the defendant.
Instead, it relied on a passage from a 1995 version of the Restatement of Unfair Competition purporting to construe the common law (ie, not the statutes) and observing that an unjust enrichment award required a ‘comparative appraisal’ of factors such as the nature and extent of the theft, the damage suffered by the plaintiff, and “the relative adequacy to the plaintiff of other remedies”.
Applying such an appraisal to the facts of this case, it concluded that the trial court’s injunction adequately cabined the risk to Trizetto’s trade secrets, which after all had only been misused in connection with a single customer.
If the court was concerned by the size and ‘punitive’ effect of the jury’s award, it is difficult to understand why it did not simply remand the case so that the trial judge could reassess the size of the monetary award in view of the permanent injunction.
Perhaps aware that it was stepping outside the normal boundaries of statutory interpretation by relying on a common law commentary, the court repeatedly emphasised that its decision was driven by the unique facts of the particular case. However, a substantial risk remains that other courts will accept this new, non-statutory gloss on trade secret damage claims.
Strategies following Syntel
Indeed, in a recent decision by the Seventh Circuit Court of Appeals, Motorola v Hytera, 108 F4th 458 (7th Cir 2024), the court seemed to embrace at least a part of the Syntel court’s reasoning, albeit in dictum explaining why a punitive damage award of over $270 million was not excessive under constitutional standards.
The court observed that damages for avoided R&D costs can differ from one case to another, depending on “how defendants used and profited from the stolen trade secrets”. For this it directly referenced the Second Circuit’s suggestion of a ‘comparative appraisal’ based on the common law Restatement of Unfair Competition. 108 F.4th at 501.
Importantly, the discussion was focused not on the availability of avoided cost damages, but on the due process implications of a large punitive damage award. As a result, it is too early to tell if the Second Circuit decision in Syntel will lead to a general narrowing of available damage theories for trade secret plaintiffs.
Still, at the moment there are lessons to be drawn and strategies to employ. First, plaintiffs can argue that Syntel was wrongly decided, or should be limited to its facts, as the court itself suggested. Second—and more reliably—counsel can closely examine and analyse the ways in which the alleged misappropriation has caused harm to the plaintiff, so that the damage expert can plausibly connect the defendant’s advantage with impact on the plaintiff.
In this regard, one might consider this observation from the Third Circuit in Oakwood Laboratories v Thanoo, 999 F3d 892, 913 (3d Cir 2021): “By statutory definition, trade secret misappropriation is harm. The trade secret’s economic value depreciates or is eliminated altogether upon its loss of secrecy when a competitor obtains and uses that information without the owner’s consent”.
In the meantime, when possible plaintiffs should choose a court outside of New York to file their misappropriation claim.
For James Pooley, who is an international trade secret expert and lawyer with experience in major lawsuits, it is “highly unusual” for a trade secret case to file a complaint with the name of the defendant redacted. In fact, as he stresses, he cannot remember seeing such instance, although he adds that in some state court practices it is common to name “doe” defendants when one does not know the defendant’s names yet.
Beyond the desire for damages, trade secret court cases are typically used as a means to create maximum discomfort for defendants, including challenging their trustworthiness and public image, and thus exerting pressure on them to settle.
However, given the contents of the complaint, Pooley says it is easy to understand why Nasdaq sought to redact the defendant’s identity and why the court would have been willing to agree. “That is because Nasdaq wouldn’t want the filing of the complaint to act as an advertisement for the defendant’s website, which is a platform for misappropriation of the Nasdaq data,” he tells IAM.
Yet Pooley does not expect an easy path for Nasdaq considering the specificity of the industry and type of information at issue. “It is always something of a challenge to run a business that relies on licensed distribution of data to multiple customers. In order to make that business model work, the company has to be able to amortise the investment in gathering and curating the data, so that it can be ‘re-sold’ to multiple customers at a fraction of the cost of developing it from scratch,” he says.
To do that, the business has to rely on restrictive covenants in licence agreements. If someone acquires the data at the subscription price and redistributes it to its own paying customers it can easily make a profit – even if its resell rates are lower. But doing that undercuts the originator and makes its business model, which is licensing to multiple customers, unsustainable, emphasises Pooley.
According to him, for this reason, Nasdaq’s lawsuit is a “very good example” of a trade secret that is a valuable compilation of data which has to be closely controlled in the process of sharing it. “That’s why a lawsuit like this makes a lot of sense: Nasdaq can’t run its business if it allows someone to take its licensed feed and re-distribute it in violation of the licence,” says Pooley.
This month, the Defend Trade Secrets Act (DTSA) turned eight years old. Signed into law by then-President Barack Obama on 11 May, 2016, the DTSA significantly shifted the needle in IP enforcement rights in the United States. Crucially, it gave trade secret holders the option to file civil claims over a trade secret theft in federal courts, without having to include a related federal claim or prove that the parties were citizens of different states.
IAM spoke to a Silicon Valley lawyer and international trade secret expert James Pooley – described as being “instrumental” in the creation and establishment of the DTSA – to reflect on the changes it has brought in and what is coming next.
According to Pooley, getting access to federal courts in cases that have some interstate dimension was a “massive improvement in the suite of tools” that were available to trade secret owners. The DTSA has made the process of enforcement much more efficient in many ways and promoted a more unified view of what trade secret law is all about, he tells IAM.
The DTSA provided much-needed uniformity across all US states – an ambition that the Uniform Trade Secrets Act (UTSA), a piece of legislation created by a non-profit organisation Uniform Law Commission (ULC), had largely failed to achieve. Historically, the law governing trade secret misappropriation developed separately in each state at the cost of uniformity and predictability.
Statistics show that every year hundreds of trade secret owners turn to the DTSA as a means of seeking redress when their most valuable business secrets are misappropriated. In the first year of enacting the new law, the number of court cases filed in the US district courts under the DTSA amounted to 173, but already a year later in 2017, it jumped to 600, an increase of 247%, and as of 2023 grew to 749 cases, up by 333% compared to 2016. According to Docket Navigator data, as of 13 May this year, the US district courts received a total of 5,159 case filings involving DTSA claims, of which 4,097 or 79% have been terminated and 1,062 or 21% are still active.
In addition to domestic concerns over uniformity and harmonisation, the DTSA was meant to help address challenges related to trade secret misappropriation globally.
“In around 2014, there were fairly pressing issues around trade secret theft internationally and industry coalition started to come together to make sure that there were available sufficient tools,” Pooley recalls. “There was a push for legislation in the US and in the EU simultaneously, so in 2016 we got the DTSA and the European Union got the EU Trade Secrets Directive.”
While the DTSA includes no explicit provision on the law’s extraterritorial application, the fact that the DTSA was enacted as an amendment to the Economic Espionage Act of 1996 (EEA), which does have extraterritorial reach, gives an important clue on the intentions of the Congress.
In 2020, Motorola Solutions Inc v Hytera Communications Corp, became the first case where a US federal court held that a civil action for private damages under the DTSA could arise from acts of misappropriation that occur completely outside the US as long as they have connection with some activities within the US. Importantly, that ruling by the Northern District of Illinois is on appeal currently. The outcome from the US Court of Appeals is being closely watched.
“The general rule against extraterritorial application of the law is normally measured against any contrary intent from Congress,” explains Pooley. “When you read the Bill that was passed and see all of that language, you come away with the sense that Congress expected that this law would apply extraterritorially, otherwise it wouldn't help resolve some of the major dimensions of the problem that it had identified.
For example, the DTSA includes recommendations of legislative and executive branch actions that “may be undertaken” to reduce the “threat of and economic impact caused by the theft of the trade secrets of United States companies occurring outside of the United States”.
Additionally, if the intent of the Congress plays a role in how courts interpret the law, it might have an extra weight that the DTSA was passed amidst a rare bipartisan support: the Bill was unanimously approved in the Senate by a vote of 87-0, and in the House of Representatives by a vote of 410-2.
The next big thing occupying the minds of the trade secret community will be a change in how this vital form of IP is managed, Pooley expects: “Trade secrets represents an area of commercial concern that still does not get adequate attention because it happens below the awareness of the executives in a company, and I think where we're headed is a major shift in that direction.”
It's a slow-moving shift, however, which started with the America Invents Act which brought about two major changes in trade secret protection when it came into force in 2011. Although it was a patent reform statute, it introduced two impactful changes on trade secrecy and around the comfort level that companies have in treating innovations as a trade secret rather than patenting them, Pooley stresses.
“One of those important changes was the effective elimination of best mode requirement, which used to threaten the validity of patents and required companies to throw all related information into their patent applications, which would get published and thereby destroy any trade secret status,” he says. “And the other one was the prior user right, which gives companies that have been using a particular technology the assurance that they can continue to use it if they've been protecting it as a trade secret, even if some later inventor comes along and tries to patent it.”
These changes, along with companies’ struggles in terms of enforcing their patent rights, are seen as motivators pushing businesses to strengthen trade secret management. “And when there is a decision made to patent something and not to patent something else, that ‘something else’ no longer just falls on the floor and everyone forgets about it, but people recognise it is an asset. So, somebody needs to be in charge of overseeing it, making sure that it is monetised and protected,” underlines Pooley.
His feeling is that this “next big thing” – normalisation of trade secret management – will happen more slowly but it will have a “profound effect” on trade secrets protection. “My professional mission has been to elevate trade secret law and practice to the same level as the registered IP rights,” he adds.
I recently returned from a ten-day trip to China, the first time I’ve visited since before the COVID-19 pandemic. Late last year my business book Secrets had been translated into Mandarin by Fang (Helen) Liu, a lawyer/scholar at the Beijing office of law firm TianTai, and published by the Tsinghua University Press.
Liu had arranged a ‘book tour’ for me to talk about US trade secret law and management to eight of the country’s leading law schools, as well as business executives.
I had been to China quite a few times before. My first ‘official’ (that is, not tourist) visit was in 1998, to mark the opening of the Beijing IP training centre, where we were told that 600 people a month from around the country were being taught the basics of IP.
And we visited the national office of SIPO, where China’s relatively new patent system was obviously in expansion mode.
This was at the time that the country had submitted its application to join the World Trade Organization (WTO), and despite the hopeful implications for global trade, there were some in our delegation that doubted China’s intentions.
They wondered aloud whether China was really serious about building IP systems, given then-current concerns about counterfeiting. I didn’t share that perspective; while there we met with judges and government officials who obviously were deeply engaged and very well informed about the importance of IP. (They also had a good sense of humour—one judge joked that they were in the process of calculating accrued royalties owed by the rest of the world for paper, printing, gunpowder and the compass!)
I returned again in 2010, this time representing the World Intellectual Property Organization and the Patent Cooperation Treaty (PTC). China had been a member of the WTO for eight years, and any doubts about the intensity of its IP focus had disappeared. That single SIPO office in Beijing was now one of two dozen throughout the country, with PCT windows like bank tellers where patent applicants could walk up for help with filing their international applications.
China’s PCT filings were growing faster than any other country, and the quality of patent examination by China as an International Searching Authority was viewed as world class.
Specialty IP courts were established. And the related promise of rapidly expanding global commerce seemed to be realised, as the number of countries for which China was their largest trading partner increased from 10 to 50 (it’s now around 80).
As we all know, trade tensions between the US and China have increased significantly in recent years, reinforced by other aspects of their geopolitical rivalry. Some believe that a slow and inexorable ‘decoupling’ is taking place. Suspicions and disruptions caused by the pandemic have not helped.
Perhaps ironically, in January 2020, just before that global crisis took hold, the two countries had signed the ‘Phase One’ trade agreement as part of a multi-year effort to reduce trade friction. And intellectual property—specifically trade secrets—was front and centre in that document.
Much more recently, I was preparing for my ‘re-entry’ into China, and I admit to having felt some apprehension about it. Not only was (and is) the US political relationship with China at the lowest ebb I can remember, but at the end of February China had just expanded its state secrets law (for the first time since 2010) to include ‘work secrets’ in the category of restricted confidential information.
No official interpretation of this new phrase was provided. And the month before, reports had surfaced about a British businessman having been detained and charged with spying. I was now going there to lecture about ‘secrets’: what could go wrong?
Such is the grasp of (mild) paranoia on our minds. As it turned out, my visit to China was enjoyable and fascinating, and I look forward to going back. Thanks to the tireless efforts of Liu and her colleagues, I was able to meet students at the top law schools in the country: Tsinghua, Renmin, Beihang, Peking University and China University of Political Science and Law; and (in Shanghai) East China University of Political Science and Law, Shanghai Jiaotong, and Fudan.
In each of these schools, the rooms were packed, with 40 to 60 students and professors. I spoke in English, only occasionally with translation. And when I was done with my talks, the questions posed by the students were unusually insightful and sophisticated, in some instances beyond what I have experienced with my students in the US.
The TianTai law firm also organised a conference in Beijing where my remarks were supplemented by business and government representatives, all focused on practical aspects of IP protection and enforcement. And my time in Shanghai included a discussion with companies at the Commercial Mediation Center.
A significant takeaway from these events and conversations was that, even though the US-China pre-pandemic trade talks seem to have broken off, China continues to work on refining its implementation of the Phase One agreement.
As I have noted elsewhere, China started surprisingly quickly on transforming its promises into relevant changes in its laws. What I learned on this trip is that those efforts are continuing today.
Even more impressively, the scholars and soon-to-be lawyers at its law schools are deeply engaged and curious about how in the US we handle issues as specific as shifting the burden of proof in a trade secret case. Clearly, they are thinking deeply about how their domestic laws can be improved. They seem equally intrigued by how US businesses view the day-to-day management of trade secret assets.
Most frequently and consistently, however, the message I heard was that those in China who deal most directly with IP—executives, scholars and students—lament the precipitous reduction in personal contacts that began with the pandemic but continues due to geopolitical and trade tensions.
Repeatedly I heard a plea for expanded, personal engagement from people who recognise that China, like all other industrial countries, needs robust IP laws not just to encourage inbound investment but as an essential support for domestic innovation.
Global trade is important. When it involves any sort of technology, trade relies largely on aligned IP laws. This was true in 1883 when the Industrial Revolution drove agreement on the Paris Convention, and even more so now that the vast majority of business assets are intangible.
Bilateral agreements such as Phase One and plurilateral arrangements like the IP5 have led to higher quality and more reliable protections. Those good outcomes start with engagement. That doesn’t mean we should let down our guard and accept misbehaviour. But just drawing into our own corners and nursing suspicions won’t move us forward.
I’m now feeling rather embarrassed that I harboured any concerns about this trip. I absolutely plan to return again. There’s too much at stake not to continue to explore our common interests in IP.
“The possibility that an inventor who believes his invention meets the standard of patentability will sit back [and] rely on trade secret law . . . is remote indeed.”
— Justice Burger, for the majority in Kewanee v. Bicron (1974)
When May rolls around, lots of people – well, trade secret people that is – think about the Defend Trade Secrets Act of 2016 (DTSA), which for the first time in U.S. history granted original jurisdiction in federal courts for civil claims of misappropriation. The DTSA was signed into law on May 11, 2016, so it’s now eight years old. And performing pretty much as Congress intended.
But this year there’s a far more consequential anniversary to celebrate. May 13 marks 50 years since the U.S. Supreme Court issued its 1974 opinion in Kewanee v. Bicron. I remember that time very well. Barely a year out of law school, I was still learning the ropes of legal practice. While walking down the hall I saw something very unusual: the senior partner sitting at his desk reading one of the “advance sheets.” (Back in pre-internet days, new case opinions were printed in pamphlets and rushed out to lawyers ahead of the bound volumes.)
I had never before seen this partner actually reading a case, so I knew it had to be something important. I stopped and asked what it was about. He just said, “the Supreme Court says trade secret law is okay.” I went on, not knowing what he was talking about. At that time, trade secret law was not taught at law schools. It was only a few years later, as the rapid emergence of Silicon Valley brought me dozens of disputes over engineers departing for competitors, that I began to understand why he had snatched up this report just as soon as it came in. And why Kewanee was undoubtedly the most important trade secret case of the century.
The seeds of this debate had been planted back in 1939, when the American Law Institute (ALI) issued its Restatement of Torts. As the name suggests, the nominal purpose of that work was to summarize for lawyers and courts the common law, as reflected in decades of decisions in individual cases from state courts. Where trade secrets were concerned, however, the ALI did not so much restate as reframe the law as it ought to be, according to the views of a few professors. How that came to be is an intriguing story, to be told another time.
This reframing began with putting trade secret law in its place relative to its statutory cousin patent law; only the latter was directed at incentivizing innovation; secrecy was just about protecting a private transaction. The Restatement went even further, denying the status of trade secrets as “property” (reversing the common law consensus) and limiting their scope to a process or device “in continuous use” in a business. No longer protected, except against deliberate espionage, were secret bids or marketing plans, or any of a company’s records of experimentation. This cramped scope of trade secret rights represented a sea change from the common law, and courts responded by creating a new, separate category to protect mere “confidential” information that didn’t “rise to the level” of a trade secret.
Trade secret law hobbled along this way for years, walking on two different legs. In this weakened state, it provoked the question whether it should even exist in the company of the more refined and majestic federal patent law, which was recognized as a spur to innovation and which benefited the public by required disclosure of inventions. Trade secrets, in contrast, developed an image of smoky back room deals among unsavory characters.
If that is a bit of overstatement for dramatic effect, it can’t be denied that the sharp knives were coming out. The drama began to unfold in 1964, when the Supreme Court decided a pair of cases, Sears, Roebuck & Co. v. Stiffel, and Compco Corp. v. Day-Brite Lighting. Emphasizing that the Constitution gave Congress the exclusive power to legislate in the field of patents and copyrights, the court invalidated state laws declaring it a form of “unfair competition” to copy an item on sale in the open market. Since trade secret misappropriation was seen as a type of unfair competition, academics suggested that it too should be “pre-empted” by patent law.
In 1973, the Sixth Circuit agreed with this argument in the Kewanee case, and because other courts had come to a different conclusion, the Supreme Court agreed to review it. Looking back from the vantage point of modern trade secret law, it might seem bizarre even to question whether trade secrets had a right to exist. As you already know from the spoiler, the Supreme Court got it right, declaring trade secrets to be no “obstacle” to the purposes of the patent law. But the decision wasn’t unanimous; two justices dissented. And the majority’s primary reasoning was flawed.
Justice Burger authored the opinion, first pointing out that as a form of protection trade secrets were “far weaker” than patents because they did not bar independent discovery by another. “Where patent law acts as a barrier, trade secret law functions relatively as a sieve.” He then described three ways to view an invention: clearly patentable, clearly not patentable, or of “dubious” patentability. The second and third categories were easily disposed of as beyond the public interest, while only the first presented a serious question of interfering with the objectives of the federal law. But in that situation, he explained, the possibility that an inventor would choose the “weaker” form was “remote indeed.” (It’s surprising that no one seemed to have informed the Court that companies with patentable processes had long opted for secrecy over patenting, in part because discovering secret infringement is difficult, and in part because secrets have an indefinite life. DuPont, for example, protected its chloride process for producing titanium dioxide as a secret for decades beyond when the patent would have expired. This is something familiar to me, as the house where I grew up was just a few miles from the DuPont factory, and its dust regularly settled on our neighborhood).
The majority’s wobbly logic about an inventor’s preferences wasn’t the only justification offered, however. Justice Marshall, concurring in the result, articulated a much simpler and more compelling reason: Congress had frequently amended the patent statute over the years while being fully aware of state trade secret law; its silence reflected an acceptance that the two regimes were complementary.
In deciding Kewanee, the Supreme Court didn’t just preserve trade secret law; it restored to it a measure of respectability. The Court directly contradicted the Restatement by declaring that one of the two pillars of trade secret policy (along with maintenance of commercial ethics) was the “encouragement” of invention – putting trade secrets closer to a place of honor equivalent to patents.
In cases decided since Kewanee, the Court continued to be kind to trade secret law. Aaronson v. Quick Point Pencil Co. enforced continuing royalties after rejection of a patent application because the licensee had bargained for an early look at the technology while still a secret. In Ruckelshaus v. Monsanto Co. and Carpenter v. United States it confirmed that trade secrets are, after all, a form of “property.” And in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., it emphasized that products available on the open market can be reverse engineered, despite contrary state laws.
In the meantime, the Uniform Trade Secrets Act was proposed, and the states steadily adopted it (or some form of it), grounding the law in statutes. The old Restatement view that only secrets “in continuous use” could be protected was discarded, in favor of the much broader measure of information of “actual or potential value” to the business. And all that “confidential information” that was supposed to “rise” like warm bread was now fully within the definition of trade secrets.
With all the patent reforms wrought in 2011 by the America Invents Act, you would have been excused for missing its two major provisions that have since reduced “trade secret hesitancy” in companies: first, the “best mode” requirement that led to pouring secrets into patent applications to avoid invalidity is now toothless; and second, the prior user right now universally protects against the threat of being blocked by a later inventor.
All of this has led to a widespread increase in focus on trade secrets as a corporate strategy. Ironically, and distressingly, at the same time the Supreme Court in a string of decisions has been diminishing, if not dismantling, the power of patents, by limiting allowable subject matter and making enforcement more difficult. We can only hope for a reset at the Court, or enlightened action by Congress.
As for trade secrets, it’s been some time since the Court has taken on a case, and honestly, I’m not sure I want to see that happen, given its current views about intellectual property. Nevertheless, we should all be deeply grateful that back in 1974 it saved trade secret law, even if its reasoning wasn’t perfect. Happy anniversary!
Maintaining control over trade secrets is mostly about risk management, and one dimension of risk lies in having to tell hundreds or thousands of employees to keep quiet and then depend on each of them to do so. Human nature being what it is, risk increases quite a bit when the secret is about something really big and important. And it increases even more if the secret shows that your employer is lying to the public. Indeed, you might think that kind of information is the very hardest to keep under wraps. But there seems to be a growing number of people who think it’s quite easy.
It was July 1969 when I first visited California, with two weeks to go until the crew of Apollo 11 were to land on the moon. But having grown up on the East Coast, I was completely distracted by the unusual climate: no humidity, no bugs, and no rain until October, guaranteed. Eventually the novelty wore off a bit and I was able to take in the amazing reality of Armstrong and Aldrin landing the Lunar Module on the powdery surface.
But was it reality? Many years later I heard that some people claimed it was all a stunt organized by NASA and the federal government to generate propaganda during the Cold War. I laughed off the idea, which represented my first exposure to a lingering conspiracy theory. (In 2002, one of its proponents managed to catch up to Buzz Aldrin and accuse him of fakery, whereupon the then-72-year-old astronaut punched him in the face.)
More recently, I was bemused to see reports that pop icon Taylor Swift’s relationship with Kansas City Chiefs star right end Travis Kelce had been engineered as a “psyop” (psychological operation) by the Pentagon to favor President Biden’s reelection with an endorsement by Swift during halftime at the Super Bowl. I was less bemused when I learned that a significant portion of the population actually believed that the government could pull off such a trick, or would even risk trying.
I have written before about how we lawyers, when dealing with “circumstantial evidence” use probabilistic logic to help us distinguish between reasonable inferences and mere speculation. When it comes to conspiracy theories like the moon landing and the Swift “psyop,” the ideas seem so preposterous that they hardly deserve a reaction. But then there’s the undeniable fact that, in the age of social media and declining trust in institutions, a whole lot of people do get drawn in to this sort of thing.
Indeed, the widespread acceptance of some conspiracy theories is disturbing, as they can corrode social cohesion. Each tribe can embrace false narratives that read on hateful stereotypes of the others, pushing us all further apart. The pull is emotional; even the term “conspiracy theory” has been attacked as the output of its own conspiracy, supposedly generated by the CIA in order to ridicule and discredit true believers.
Although “conspiracy” is used broadly in the law – defined generally as the activity of secretly planning with other people to do something illegal – “conspiracy theory” is distinct and pejorative, referring to a hypothesized conspiracy, and suggesting that the person promoting it is motivated by prejudice and emotion and has no actual evidence that the hypothesis is true. In a sense, the conspiracy theorist operates on the same set of principles that define the law of evidence, but the “circumstances” they draw on to support an inference are spread almost infinitely thin, as when just two stars are said to represent a complex constellation.
Setting themselves against the mainstream consensus on whatever the topic is, the conspiracy theorist takes comfort in the fact that, although they cannot prove the proposition with evidence, neither can their opponents conclusively disprove it. All they need is what they view as a plausible assumption, and then any absence of evidence to support it is folded into the conspiracy as proof of its existence and of the determination of the powers that be to fool the gullible public.
You will probably be relieved that I don’t intend here to weigh in on Pizzagate, whether jet contrails are actually “chemtrails,” or whether the attacks on 9/11 were faked. For those who have convinced themselves of these stories, there is almost no point in arguing. Rather, my concern is with the current inclination of society to accept as genuine these deeply improbable ideas just because they align with an assumption of malevolent and all-powerful institutions.
Indeed, the readiness of substantial portions of the population to accept the most outlandish claims of government manipulation is well demonstrated by the “Birds Aren’t Real” conspiracy. In 2017 Peter McIndoe began circulating the story that all birds are actually robotic surveillance drones created and operated by the federal government, which had supposedly killed the real birds in a secret operation between 1959 and 1971. He managed to hide the satirical purpose of his organization for four years, by which time he reportedly had amassed a movement with hundreds of thousands of members.
Reflecting on the general subject of conspiracy theories, I decided that I might be able to make a small contribution to the discussion, drawing on my own experience in government, as well as over 50 years dealing with issues around secrecy management.
First, consider the government, which in most cases is presumed to have designed and implemented an extremely complex operation, with the presumed cooperation in most cases of hundreds or thousands of employees and officials. Put aside for the moment the supposed slaughter of billions of birds while no one was paying attention, and focus just on the details of planning and execution in the moon landing, when hundreds of engineers were watching from Mission Control (where their equipment had to have been modified to receive a feed from a studio with actors in spacesuits, instead of from Apollo 11 and the actual astronauts). The “psyop” involving Taylor Swift would have been equally daunting to organize, involving not only Ms. Swift and her boyfriend but all those close to them who would have to play their roles.
The complexity of conspiratorial designs increases dramatically when (as is very often the case) the supposed objective is some form of collaboration among elites to establish a New World Order. In that case you would have to coordinate the activities of almost 200 countries that have in recent decades (or centuries) become rather settled in their own sovereignty.
Having spent five years inside the world’s largest bureaucracy, I have experienced firsthand the pace and quality of decision-making among nations. One example should make the point. At the outset of a meeting (among all the member states) that was scheduled to last five days, it took us an entire day and a half just to get agreement on the meeting agenda. That’s not to say that the delegates were not hard-working and sincere; I found the working level representatives to be dedicated and smart. But when it comes to usurpation of national prerogatives, I can confidently report that we have absolutely no reason to fear the formation of a transnational government exercising authority in the United States.
In a similar vein, while at the UN I worked closely and frequently with State Department staff, who I found to be almost universally competent and committed to their mission. I could not conceive of them forming some cabal to seize the reins of power and construct an elaborate scheme to trick the American public.
But there is a more prosaic, and reliable, reason to feel confident about this, apart from the professionalism of those who work at UN or U.S. agencies. That’s because virtually all of these imagined “conspiracies” depend on hundreds or thousands of people keeping silent about what they are actually doing. On this point, I depend not only on long experience with people dealing with commercial secrets. All of us began learning this basic message in grade school: if someone tells you a secret, you can’t wait to get out on the playground and find someone else to tell it to. That inclination to share can be brought under control to an extent when we become adults; but as we know, even in the CIA there are those (thankfully few) who break their promise.
So, the next time you run into someone who is pushing a conspiracy theory, especially one that involves a big event or a big set of consequences, ask them this: how many people would have to be in on it in order for the government to pull it off? And how likely is it that every one of those people, down to the lowest staff levels, will never utter a word about the plot?
Secrecy can be hard to manage. For most people, the more important the information, the more it burns inside until they get to share it. Even the Pentagon could not have kept the lid on the Taylor Swift caper – if it were a real thing.