Back to School Edition: Trade Secrets Go Off to College

After the long break, students have returned to colleges and universities across the country where they will trade late summer nights out with friends for tossing Frisbees on the quad.  As classes begin, we at TSW wanted to take a moment to look at some trade secrets disputes at the heart of higher education.

Specifically, the higher education sector has seen trade secrets disputes in several areas:

• Admissions: Colleges and universities have become hyper-competitive with their recruiting efforts.  However, sometimes this drive to attract the best and the brightest can lead to an FBI complaint. That’s what happened several years ago when Princeton's Director of Admissions was accused of hacking into Yale's admissions database to find out who Yale had admitted and rejected. A Yale investigation determined that Yale’s database had been improperly accessed over a dozen times, and the Princeton admissions director admitted to using the names and Social Security numbers of Princeton applicants to determine their admission status at Yale.


• Athletics: Athletics also play a large role on many campuses, and the rivalries between schools can become cutthroat. This can lead to teams trying to steal their opponent’s plays to gain a competitive advantage. As we previously reported, Wake Forest University’s football team had its plays revealed to opposing teams in a scandal dubbed “#WakeyLeaks.”  Tommy Elrod, a former assistant coach at Wake Forest, allegedly shared Wake’s game plans with other college football teams.  Wake Forest officials began their investigation after finding suspicious materials left behind by University of Louisville coaches following the team’s loss to Louisville in November 2016. Eventually, the Atlantic Coast Conference fined Louisville and Virginia Tech for accepting the plays from Elrod. Although Wake did not pursue further legal action against these schools or Elrod for misappropriation of trade secrets, commentators have opined that the efforts teams take the maintain the secrecy of their playbooks—such as handing them out only to individuals who need to know the material and restricting public access to practices—make the game plans deserving of trade secret protection.

Similarly, some college teams create their own scouting reports for potential recruits. Although there have not been any recent cases of colleges trying to purloin the competition’s player rankings, in the 2012 case of National Football Scouting, Inc. v. Rang, National Football Scouting, Inc. alleged that a sports writer published the scouting grades for 18 college football players who were turning pro. While the sports writer argued the scouting grades were based on subjective opinions rather than facts, the U.S. District Court for the Western District of Washington disagreed. Instead, the court found that assigning specific grades to prospects constituted information with an independent economic value and therefore, the grades were protectable trade secrets.

• Inventions: Professors are routinely responsible for developing groundbreaking products. In some cases, the individual assigns their rights in the invention to the university, which can create massive revenue streams for the school. Generally, individuals own the inventions they create, as the U.S. Supreme Court affirmed in Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc. However, where there is an express agreement providing for assignment of ownership to an employer or an implied agreement to assign because the employee was hired to invent a certain product or solve a specific problem, the university may be able to take ownership of the invention. According to the American Association of University Professors, an increasing number of universities require faculty to assign their rights to inventions and trade secrets to the school as a condition of employment, citing use of university facilities as a justification. In other instances, universities allow faculty to maintain ownership of their intellectual property but require them to share profits with the institution once the intellectual property is commercialized.

With colleges starting back around the country, it is important for employers and employees alike to be aware of potential intellectual property issues so they do not get ”schooled” in the trade secrets realm. For more information on the latest trade secrets new, continue to follow us at TSW.