* The authors are, respectively, John M. Olin Visiting Fellow in Law and Economics, Clifton R. Musser Professor of Economics, and Senior Lecturer, all at the University of Chicago Law School. This paper was prepared for a symposium on intellectual property sponsored by the Journal of Economic Per spectives and held in Washington, D.C., on October 20, 1989. We thank the symposiasts and Timothy Taylor for helpful comments.

2 An exception is Edmund W. Kitch, The Law and Economics of Rights in Valuable Information, 9 J. Legal Stud. 683 (1980).

3 By "common law" we mean law made primarily by judges. Although there is federal as well as state common law, trade-secret law is a part of the latter rather than the former. It is no longer a pure common law area, because a number of states have adopted the Uniform Trade Secret Act; but like other uniform laws, notably the Uniform Com mercial Code, the Uniform Trade Secret Act is for the most part codifi cation rather than repudiation of the common law.

4 Carpenter v. United States, 108 S. Ct. 316 (1987). The statute is 18 U.S.C. [[section]] 1341; see also [[section]] 1343 (wire fraud).

5 431 F.2d 1012 (5th Cir. 1970).

6 Such an analysis is implicit in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 482-90 (1974).

7 As the Court recognized in Kewanee. This was one of the reasons it gave for rejecting the argument that the patent statute preempts (abrogates) the states' common law of trade se crets. 416 U.S. at 487, 491.

8 Edmund W. Kitch, The Nature and Function of the Patent System, 20 J. Law & Econ. 265 (1977).

9 35 U.S.C. [[section]] 102(g).

10 35 U.S.C. [[section]] 102(b); Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946) (L. Hand, J.).

11 Cf. William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325 (1989).

12 It may seem inconceivable that there would be no law against theft; but the law could forbid breaking and entering without punishing separately the theft of the trade secret that the burglar took.

13 William M. Landes & Richard A. Posner, The Economic Structure of Tort Law, ch. 6 (1987).

14 See text accompanying note 10 supra.

15 Semiconductor Chip Protection Act of 1984, 17 U.S.C. [[section]] [[section]] 901 et seq. See id., [[section]] 906.

16 Leo J. Raskind, Reverse Engineering, Unfair Competition, and Fair Use, 70 Minn. L. Rev. 385 (1985).