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Wednesday, 15 July 2015

Email addresses as a trade secret; email addresses as a Trojan Horse?

Among the most challenging IP decisions is whether, and under what conditions, to disclose one’s trade secret. A recurring context where this decision is made is in connection with a patent application. When a person
chooses to file a patent application, he in effect agrees that the contents of the trade secret embodied in the application can be disclosed to the public. Another context in which a decision about whether disclosure should be made is in connection with a commercial transaction. The risk is that the receiving party will not maintain the secrecy of the confidential information -- or will use it for purposes outside of the commercial framework between the parties (a joint venture in China with a Chinese partners is frequently raised in this connection, whether justifiably or not).

An interesting variation of this theme was discussed in an article that appeared in the 30 May issue of The Economist. Entitled “Exploring the Amazon”, the article enumerated various measures that Jeff Bezos, as the owner of the financially troubled Washington Post, has taken since acquiring the newspaper in 2013, the theme being that Bezos continues to apply solutions from his world of technology to the challenges of newspaper journalism. In that connection, the piece described the following:
"The Post has introduced a “partner” programme, in which it offers free access to its articles for subscribers of other papers such as the Dallas Morning News, if they sign in with their e-mail addresses. Logged-in readers like these are more valuable to a paper and its advertisers than anonymous ones, because the ads can be tailored to match whatever is known about their interests. So far more than 270 papers have signed on. This resembles how Amazon achieves dominance in its markets by gathering data on customers, the better to sell them stuff. Some newspaper bosses are cautious. “It’s a Trojan horse,” says one, who thinks publishers are unwise to share their subscriber lists with the Post and its advertisers.”
What exactly is of trade secret concern here? The answer is: the aggregate email addresses of the subscribers. Anyone who wants to show the broad scope of what is protectable as a trade secret will likely mention a customer list. What could be further from patentable subject matter, yet still be of value to its owner as a trade secret, than a customer list? Email addresses of subscribers can be likened in this respect to the classic customer list. Thus misappropriation of the email addresses might be a concern.

But is that the case here? Unlike the fear of working with a rogue joint venture partner, who might misuse the trade secret in violation of the agreement between the parties, there is nothing in the paragraph quoted above that suggests that the Washington Post is breaching its arrangement with the other papers with respect to subscriber email addresses. Rather, the subscriber information seems to be provided to the Washington Post in exchange for making certain of its contents available for readers of the other newspapers. Presumably, instead of the paper paying to the Washington Post a royalty or other form of syndication fee, the Washington Post receives consideration in the form of email address information.

Not forgetting the Trojan Cat ...
What then is the concern of those newspaper bosses who see the transaction (Washington Post contents in exchange for email address information), as undesirable? The Washington Post poaching subscribers from these newspapers seems an unlikely outcome. How many subscribers of the Dallas Morning News (an excellent regional newspaper) will discontinue his or her subscription in favour of one with the Washington Post? The answer is—“few or none”. Indeed, the opposite appears more likely, namely that selected Washington Post contents will enhance the attractiveness of the local newspaper for its readers. As for using the information to enable advertisers of the Washington Post to better reach these subscribers, here as well, it does not seem likely that such a measure will deleteriously affect the relationship between the regional newspaper and its subscribers. And any concern of misappropriation or unfair use of the email addresses can be dealt with by contract. As such, I fail to see any threat of a Trojan Horse in the arrangement by which subscriber e-mail information is being shared. Or have I missed something?

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