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Centre for Transformative Innovation and Swinburne Law School: Research Seminar

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Date: Thursday 22 June 2017
Venue: Moot Court, TD120, Swinburne University, Hawthorn Campus

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Why Do Startups use Trade Secrets?

by Associate Professor David S. Levine
Associate Professor of Law at Elon University School of Law and Affiliate Scholar at the Center for Internet and Society at Stanford Law School (CIS)


Empirical studies of the use of trade secrecy are scant, and those focusing on startups non- existent. In this paper, we present the first set of data — drawn from the Berkeley Patent Survey — on the use of trade secrets by U.S. startup companies in the software, biotechnology, medical devices, and hardware industries. Specifically, we report on the prevalence of trade secrecy usage among startups. Additionally, we assess the importance of trade secrets in relation to other forms of intellectual property protection and barriers to entry, such as patents, copyrights, first-mover advantage, and complementary assets.

We segment these results by a variety of factors, including industry, company business model, overall revenue, patenting propensity, share of engineering employees, funding sources, innovation types, and licensing. From this segmentation, we implement a basic regression model and report on those factors showing a statistically significant relationship in the use of trade secrets by startups.

Based upon these models, we examine the relative propensity of startups to choose secrecy over patenting. Finally, we comment on the limitations and implications of our results. 

This project is being conducted with Prof. Ted Sichelman of University of San Diego Law.

About the speaker

David S. Levine is an Associate Professor of Law at Elon University School of Law and an Affiliate Scholar at the Center for Internet and Society at Stanford Law School (CIS).

He is a 2016-2017 Fellow at Princeton University's Center for Information Technology Policy (CITP). He is also the founder and host of Hearsay Culture on KZSU-FM (Stanford University), an information policy, intellectual property law and technology talk show for which he has recorded over 250 interviews since May 2006. Hearsay Culture was named as a top five podcast in the ABA's Blawg 100 of 2008 and can be found at

His scholarship, which has been published in several law reviews including Florida, North Carolina and Stanford Online, focuses on the operation of intellectual property law at the intersection of technology and public life, specifically information flows in the lawmaking and regulatory process and intellectual property law's impact on public and private secrecy, transparency and accountability. He has spoken about his work in numerous venues, from the American Political Science Association annual meeting to the Information Society Project at Yale Law School, and internationally.

Active in policy analysis, he has made presentations to the negotiators at several negotiating rounds for the Trans Pacific Partnership Agreement (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP), testified before the Library of Congress, co-authored influential law professors’ letters regarding the TPP, Defend Trade Secrets Act (DTSA), Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA), and is a past member of the North Carolina Mining and Energy Commission's Protection of Trade Secret and Proprietary Information Study Group that was tasked with writing the state's hydraulic fracturing regulations. Having been interviewed and quoted in many media outlets, including NBC News, NPR, and The Los Angeles Times, and he is a recurring contributor to Slate.

He was previously a resident fellow at CIS, legislative aide in the New York State Assembly, assistant corporation counsel for the City of New York and in private practice in Manhattan. He holds a BS in industrial and labor relations from Cornell University and a JD from Case Western Reserve University School of Law.

This research seminar is brought to you by Swinburne Law School and the Centre for Transformative Innovation. Join our monthly seminar series - check the Faculty of Business and Law events page for future seminars.

Contact Information: Jake Goldenfein
Email: Tel: +61 3 9214 8942