Prior Restraints and Intellectual Property: The Clash Between Intellectual Property and the First Amendment From an Economic Perspective

Abstract

Intellectual property is under attack. In 1999, in Ford Motor Co. v. Lane, a federal district court judge denied a preliminary injunction to prevent disclosure of a trade secret on the grounds such an injunction would be a prior restraint in violation of the First Amendment. More recently, this same argument prevailed in DVD Copy Control Assoc. v. Bunner, 113 Cal. Rptr. 2d 338 (Ca. Ct. App. 2001). (On February 20, 2002, the California Supreme Court granted the petition to review Bunner (see 2002 Cal. LEXIS 614)). The use of preliminary relief to protect intellectual property has a long history. It is especially necessary to protect volatile intellectual property such as trade secrets since such property ceases to exist once it is disclosed to the public. Such relief has typically been utilized by courts to protect trade secrets with little discussion; additionally, such relief is authorized by the Uniform Trade Secrets Act. Nevertheless, a legitimate argument can be made that such preliminary relief may impinge upon First Amendment rights. Several well-known commentators have written in support of prohibiting preliminary injunctions to protect trade secrets and intellectual property generally. This article explores the interaction of the First Amendment and the need to protect intellectual property via preliminary relief. It starts with the proposition that freedom of speech and private property rights are equally important fundamental rights. It then explores the underlying policies of freedom of speech and the recognition of private property, which includes recognizing intellectual property as a form of private property. The article reaches different conclusions depending upon the type of intellectual property involved. However, it provides an argument that both Ford and Bunner, discussed above, are incorrectly decided with regard to trade secrets.