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Microsoft Businesses Patents The Courts

Why Legal Experts Are Up In Arms Over a Trade-Secrets Bill Microsoft Loves (cio.com) 48

itwbennett writes: At a Senate Judiciary Committee hearing on Wednesday, lawmakers heard arguments over the Defend Trade Secrets Act of 2015. The proposed legislation would allow companies to pursue trade-secrets cases in federal court much as they can copyright or patent cases, thereby freeing them from the state-level constraints of today's laws. It also allows for so-called ex parte seizure, enabling a company that thinks a secret has been stolen to ask the government to seize a suspected thief's property without notice, to prevent misuse of that secret. It's the ex parte seizure provision, as well as the bill's potential to increase the duration and cost of trade-secrets litigation, that prompted more than 40 law professors to write a joint letter expressing their concern. Companies have long protected algorithms such as consumer credit-scoring mechanisms under trade-secret law, intellectual property expert and Hamline University professor Sharon Sandeen said in an interview after the hearing. If passed, the new bill could give them new powers to conceal those algorithms, she said. Voicing the opposing view, lawyers from Corning and DuPont cited the increasingly digital and global nature of trade-secrets theft, a sentiment that was echoed in a blog post by Jule Sigall, Microsoft's assistant general counsel of IP policy and strategy.
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Why Legal Experts Are Up In Arms Over a Trade-Secrets Bill Microsoft Loves

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  • Microsoft... (Score:2, Informative)

    by Anonymous Coward

    ... the root of all evil.

    • "... the administrator of all evil."

    • Wha? With that, you have to add AT&T, Comcast, Apple, Sony, Google, Samsung, Oracle, et al. to the list... I see no reason why you have a 2, Informative. All the major tech companies lobby congress for business practices that favor their position in the marketplace.
  • by VorpalRodent ( 964940 ) on Thursday December 03, 2015 @04:45PM (#51052453)
    The Secret Provisions that Microsoft Lawyers Don't Want You To Know
    Take a Look at These Seven Trade Secrets Microsoft is Hiding From You
    These Legal Experts Will Restore Your Faith in Humanity
    Microsoft Angers Legal Experts With This One Weird Trick
    • Sorry, no mod points right now... but this one is freaking brilliant!

      Microsoft Angers Legal Experts With This One Weird Trick

  • by Anonymous Coward

    ...sounds to me like Microsoft is setting themselves up to become patent trolls to keep them afloat when their cash cows (Windows and Office) dry up.

  • State Courts (Score:3, Interesting)

    by Etherwalk ( 681268 ) on Thursday December 03, 2015 @04:51PM (#51052503)

    As a general rule, nobody wants to be in state courts if they can help it. There are exceptions, and there are some good state courts, but you still would almost always rather be in federal court. If they could figure out a way to put all trade secrets cases in the commercial division in New York, for a counterexample of a good state court system, they might do it. But depending on the patchwork of inconsistent quality and law in state courts, if you're a big company in particular you'd rather just deal with federal courts.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Federal court has zero ethics (yes, I've sat through cases). Not to mention that "ex parte seizure" is inevitably and severely abused.

    • As a general rule, nobody wants to be in state courts if they can help it. There are exceptions, and there are some good state courts, but you still would almost always rather be in federal court. If they could figure out a way to put all trade secrets cases in the commercial division in New York, for a counterexample of a good state court system, they might do it. But depending on the patchwork of inconsistent quality and law in state courts, if you're a big company in particular you'd rather just deal with federal courts.

      That is the cost of those companies rooting themselves in those states.

    • Re:State Courts (Score:5, Insightful)

      by gtall ( 79522 ) on Thursday December 03, 2015 @06:03PM (#51053071)

      Well, that...but it is also a nice tidy way to effectively patent the unpatentable. This is an end run around the notion that mathematics is not patentable. Nope, now it's a "trade secret"...cue the angelic choir of thousands of lawyers giving thanks.

  • Trade secrets (Score:2, Insightful)

    by Anonymous Coward

    Still not getting why the government needs to intervene in the protection of trade secrets. That's why patents exist.

    • Re:Trade secrets (Score:5, Insightful)

      by alva_edison ( 630431 ) <ThAlEdisonNO@SPAMgmail.com> on Thursday December 03, 2015 @05:11PM (#51052659)

      Exactly. We made a decision early on that keeping secrets was bad for broad innovation, so we came up with patents. You get protection, but no more secret. If you want to keep your secret, you give up on extra protection. So a leaked secret shouldn't have extra protection.
      As much as the patent system sucks, it still gets a public record of inventions that we might not otherwise be able to recreate.

      • by Anonymous Coward

        except typically a trade secret can be so ambiguous/retarded/general that even patent office won't touch. but a good way to cull competition.

    • Depends how someone got them. If you manage to clean-room reverse engineer the formula for Coca-cola, then you're legally in the clear (at least as it currently stands). If however you steal that formula, then it's understandable that perhaps different rules should apply.

      The tricky thing, from what it sounds like to me at a glance, is the ex parte bit, as the law professors cite above. To use the Coca-cola example, the question becomes what redress does Pepsi have if Coca-cola accuses them of stealing the
      • Re:Trade secrets (Score:5, Interesting)

        by rtb61 ( 674572 ) on Thursday December 03, 2015 @06:05PM (#51053095) Homepage

        How ever the sound limit on prosecution from breaching trade secrets is the actual theft and only the theft, beyond that nothing. You had a secret, it was exposed tough luck, you should have patented it and if it wasn't patentable then you have nothing. The problem is they simply can not claim it is impossible to come up with the same solution. It looks very much like M$ is shifting to a litigation and marketing engine and it wants to claim as criminal exposure of it's massive invasion of privacy Windows anal probe 10 as an infringement of it's trade secrets. How far it will go to steal your information and you intellectual property and how it will do it, apparently will become defined as a trade secret and any exposure of it a criminal offence. You can wrap all sorts of stuff around trade secrets eg a list of customers is a trade secret.

  • Wouldn't this help enforce GPL compliance?

    • by Anonymous Coward

      No, GPL compliance depends on copyright.

      Trade *secrets* are 100% incompatible with the definition of "open source".

    • by mikael ( 484 )

      A trade secret is a way of using software or hardware in a way that is extremely profitable to the original developer by helping to reduce costs or increasing profits.

      It might be a new way of ranking search engine results using natural language processing. Maybe it's a way of improving yields in silicon chip manufacturing, or improving performance in a graphics algorithm, or performing stock trade predictions. Some companies have resorted to encoding these algorithms in custom ASIC's so that there is no way

  • To clarify... (Score:5, Insightful)

    by Fire_Wraith ( 1460385 ) on Thursday December 03, 2015 @05:16PM (#51052695)
    Trade secrets are a little different than patents or copyrights. A trade secret is something like the full list of KFC's original 11 herbs and spices, or the formula for transparent aluminum. To give an example of the difference between patents, copyright, and trade secrets, etc, let's consider Coca-cola:

    The Coca-cola name and logo are trademarks.
    If Coca-cola were to come up with a new method of putting carbonation in soft drinks, they might file a patent for that process.
    If Coca-cola came up with song as an advertising jingle, they would own the copyright to that song.
    And the (secret) formula for Coca-cola is a trade secret.
    • Note, of course, that none of that means the concept can't or won't be abused - just to try and clarify some of the general differences in the concept. (Also, Not a Lawyer, etc.)
  • by kheldan ( 1460303 ) on Thursday December 03, 2015 @05:30PM (#51052815) Journal
    That's what this would be: Microsoft and companies like them being able to almost literally black-bag people, take everything they own, and leave them with no legal recourse and no rights, just on their say-so that their alleged trade secrets have been 'stolen'. Sure, no potential for massive abuse here, no sir-eee.
    • by AHuxley ( 892839 )
      Yes after doing anything near the brands products or services your profession, university degree/s, skill sets ie a persons livelihood is at risk of been legally
      confiscated by a private company on a whim. A secret denunciation with the full force of gov backing.
      The only protection is never to work on a product, project related to a company that will go after its workers or contractors in such a direct way.
      What next? A special short list of cleared lawyers who can read the hidden charges in a special cl
  • by smellsofbikes ( 890263 ) on Thursday December 03, 2015 @06:38PM (#51053291) Journal

    Patents are so inconvenient: limited lifetime, you have to publish how you're doing what you're doing. Much easier to just turn trade secrets into secret, infinite-life patents, now with government protection and a nice threat for any small companies that dare to try to compete with you.

  • Long, long ago, in a land far, far away there were people that were very protective of their ideas. They'd go to great lengths to keep these ideas to themselves. Skilled workers were very protective of the processes they used to create their products. I recall reading of factories where the workers would never leave. They'd have effectively a castle built to house the workers and equipment. Food and raw material would enter and finished product would leave. As technology improved and society developed the concept of intellectual property was eventually born. In this way the people with the knowledge and skills would no longer have to be locked up to protect industrial processes.

    This idea of intellectual property didn't end the practice of trade secrets but did provide an option to people that thought intellectual property laws were a better option than building a castle and trying to convince skilled craftsmen to lock themselves inside of it. The trade off was that the ideas that would otherwise be held a secret would be exposed to the government. The government would then give a time limited protection to the use of that idea so that the creator, and society, may profit from the idea. Any violations of this protection was therefore enforced by the government.

    The problem with government enforced trade secrets is that the government does not know what they are protecting before there is a claim of a violation. The government would essentially have to rely on the claimant that the idea was actually their own to begin with. The accused would likewise have to show that they came up with the same idea independently, lawfully acquired the idea, or some other defense that would prevent prosecution.

    In law and in theory the accused is innocent until proven guilty but in practice that does not always hold true.

    I see so many ways that this could be abused. Unfortunately I cannot get the article to load, perhaps it's been slashdotted, so I don't know if the article spells out all the ways this law can be abused. We already have a very long history of legal protections of intellectual property, I see no need to change it now. If someone wishes to keep something a trade secret then they need to make sure no one else finds out through existing legal means. If someone wants legal protections of their intellectual property then they need to share that with a government body first, before it is revealed to anyone else, so that there is no question on who came up with the idea first. Without this prior revelation then there is always a reasonable doubt on who owns the property.

    This bill should not become law, of only because any claim against it would be nearly impossible to prove in a court. As someone that has developed intellectual property for a living I believe I have a pretty strong understanding of how intellectual property laws benefit us all. I also understand the need to simply keep things to yourself if you want to keep something secret. For example, if I kept a crypto key (or a house key) in a obscure location then I can't be expected to have the government punish someone because they happened upon where I kept it. If that key enables someone to snoop around my electronic files (or my refrigerator) then there are laws against that. I can expect the government to protect my property to the extent that I made an effort to secure it, but if I don't secure my stuff then why should I expect the government to do that for me?

  • ...to seize a suspected thief's property without notice, to prevent misuse of that secret.

    Um, if it is a secret idea/algorithm/recipe/etc.... what good would it do to seize physical property? Are they going to grab every computer/laptop/thumbdrive/DVD/Backup drive/smartphone that belongs to a company in the hopes that they will get all copies of the stolen secret? Am I missing something here?

  • Very Bad (Score:4, Insightful)

    by ewhac ( 5844 ) on Thursday December 03, 2015 @08:27PM (#51053959) Homepage Journal
    Who remembers the DeCSS DVD kerfuffle?

    Briefly, a kid in Norway named Jon Johansen, along with other programmers in Germany, reverse-engineered the Xing DVD player, and published DeCSS, an independent implementation of the Contents Scrambling System (CSS) that was used on DVDs to deter unsanctioned copying, allowing Linux users for the first time to view DVDs on their computers. Subsequent research among crypto experts yielded more general solutions, and now CSS is effectively a no-op.

    The DVD Copy Control Association -- DVD-CCA, the organization that licenses the creation of Hollywood-sanctioned DVD players -- tried to sue DeCSS out of existence in a California court. Their primary argument? That CSS was a trade secret that Johansen had improperly obtained and disclosed.

    What was "improper" about it? His reverse-engineering violated the (*snicker*) "license agreement" attached to the Xing player.

    Further, the DVD-CCA (incorrectly) argued, everyone who came in contact with DeCSS "knew or should have known" that CSS was a trade secret, and not to traffic in it, and asked the judge to put a restraining order on the Internet to prevent further distribution. (DVD-CCA also tried to argue that reverse-engineering is never proper or appropriate.)

    Although the DVD-CCA's case was never resolved, CSS today is effectively useless as a copy protection mechanism, and DeCSS or its functional equivalent is widely available.

    This legislation from Microsoft would appear to be an attempt to defend against such activity, and prevent people from ever inspecting or exercising control over their computers again.

    Trade secrets are a weird edge case in intellectual property. They are not explicitly called out in the Constitution (as are copyrights and patents), but enjoy recognition in the courts. Unlike trademarks and patents, however, trade secrets do not need to be registered -- they exist solely by fiat (i.e. they exist because the company declares they exist). Trade secrets also do not have a formally defined "limited time" as Constitutionally required of copyrights and patents -- the inherent fragility of maintaining any kind of secret indirectly establishes the trade secret's limited lifetime.

    Microsoft's proposal would greatly extend the reach and lifetime of trade secrets beyond their traditional scope.

  • This /. title looks like a bad clickbait.. straight from some free translation service.
    "Why Legal Experts Are Up In Arms Over a Trade-Secrets Bill Microsoft Loves "

    I'm not native english but "a trade-secrets" does not compile. Do they mean that Microsoft Loves "Trade-Secrets Bill" ?

  • Slashdot needs better story moderation. By using click bait language you are poisoning my neural network to actually try to deciper the sentence rater than just ignore it as normal ads. Please do not do this.

...there can be no public or private virtue unless the foundation of action is the practice of truth. - George Jacob Holyoake