Computing machines were not always such effective secret-keeping Oompa Loompas. As this Article describes, at least three recent shifts in the computing industry — cloud computing, the increasing primacy of data and machine learning, and automation — have turned these machines into the new Oompa-Loompas. While new technologies enabled this shift, trade secret law has played an important role here as well. Like other intellectual property rights, trade secret law has a body of built-in limitations to ensure that the incentives offered by the law’s protection do not become so great that they harm follow-on innovation — new innovation that builds on existing innovation — and competition. This Article argues that, in light of the technological shifts in computing, the incentives that trade secret law currently provide to develop these contemporary Oompa-Loompas are excessive in relation to their worrisome effects on follow-on innovation and competition by others. These technological shifts allow businesses to circumvent trade secret law’s central limitations, thereby overfortifying trade secrecy protection. The Article then addresses how trade secret law might be changed — by removing or diminishing its protection — to restore balance for the good of both competition and innovation.
NYU Law Review