The following HTML text is provided to enhance online
readability. Many aspects of typography translate only awkwardly to HTML.
Please use the page image
as the authoritative form to ensure accuracy.
Global Dimensions of Intellectual Property Rights in Science and Technology
tion. When damages can be demonstrated, the awards are often trebled. Thus the legal consequences of the unlawful use of proprietary information can be painful for the company found guilty. Proving guilt is another matter. Litigation is expensive, distracting, and time-consuming, and the results are not predictable. Large companies are not anxious to use legal protection, but it poses no major downside risk unless the company engages in demonstrably illegal behavior in the name of protecting its proprietary information. However, for the small company, litigation as the respondent can be disastrous. The upside is minimal, and the downside is the potential for loss or major damage to the company and major legal expenses.
Large companies sometimes use the threat of litigation or actual litigation effectively as a major weapon in their attempt to protect their proprietary information. Unfortunately, they may also use it for other purposes that are not legal. The law provides protection from wholesale raiding of the employees of one company by another. That is a separate issue and is not covered here. The loss of employees may be viewed as significant to the company even when the numbers are sufficiently low that no clear case for raiding can be made. Hence, companies sometimes use protection of proprietary information as a screen for what in reality are attempts to limit loss of key employees (when the number lost is lower than that protected against by conventional legal practice).
Ostensible protection of proprietary information can be used to hinder the start-up or small company so that it cannot compete effectively in several ways: by tying its management up, by diverting its funds to legal expenses, by inhibiting its ability to raise additional capital, by casting doubt on its ability to deliver a product unencumbered by legal difficulties, and by limiting its ability to hire new people who may be concerned about the future of the company. Indeed, litigation or the threat of litigation casts a deep shadow on new or small companies, and effectively hobbles them. It further protects the large company, whose own employees are intimidated by what they see and are loathe to leave to join the target company or other potential target companies. It also subtly intimidates employees of the large company from planning other start-ups.
The point is that although companies have a right and an obligation to protect their proprietary information, they may also use protection of proprietary information in violation of antitrust law. One may argue that individuals in small companies or aspiring to new businesses have a right to earn a livelihood using their intellect, experience, training, and acquired knowledge from previous employment. It may be further argued that a first company, trying to prevent individuals from joining a second company or practicing their profession in the area of their expertise on behalf of that company, because of the alleged use or inevitable use of the proprietary information of the first company, is acting in restraint of the rights of the