The US Federal Trade Commission’s (FTC) recent enactment against employer noncompete agreements may result in an increase in patent filings and trade secrets litigation. Evidently, this move is a consequence of companies’ strategies to fortify their intellectual property rights, particularly against employees who depart their workforces.
As announced on April 23rd, the FTC’s final rule was instituted with the goal to invigorate innovation and competition, while affording workers an escape from “often exploitative” labor practices. However, some legal experts predict an unintended consequence — this rule, due to become effective 120 days after publication in the Federal Register, may boost “poaching” among rival businesses.
In the words of Joseph Lanser, a partner at Seyfarth Shaw LLP, “It will impact trade secrets substantially. Litigation is …”
In summary, while the FTC’s new policy banning noncompete agreements may liberate some workers from unfavorable labor practices, it also potentially establishes a whole new arena of legal conflict over intellectual property rights.
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