Intellectual Property

Within the film, there is a large connection to intellectual property. The copyright laws and agreements in the movie that were portrayed included the "Works Made for Hire" contract, a non-compete agreement, and the Non-Disclosure Agreement.

Works Made for Hire

Anton and Vincent handing in their resignation papers and ending their employee contracts, however the Works Made for Hire is still in effect

When Vincent and Anton left the company, Eva confronts them with this statement: "All the information, the data, the research, obviously, my codes, they stay here."

Vincent replies: "Your codes? Sorry, they're his (Anton) codes. Thank you."

Eva counters: "Everything in that head (Anton's), its ours... That part of his brain belongs to us!"

In this exchange, a couple of arguments are being made about proprietary code. On one side, Eva believes that Anton's code belong to the company and that he could not use it for other purposes. On the other side, Vincent believes that whatever code Anton made belonged to the creator.

The winner of the argument depends on the existence of a "Works Made for Hire" contract between Eva and Anton. A "Works Made for Hire" contract states that all works created by an employee during the scope of their employment is owned by the company. hence, "a software program created by a staff programmer within the scope of his or her duties at a software firm" is an example of a "Works Made for Hire" contract [2]. When Anton was arrested and being interrogated by the FBI, the agent relayed the statements Eva made about Anton's use of the code: "These lines of code shorten the transaction time by two microseconds. Using them outside of the employee's duties is a serious breach of contract." This confirms that there was indeed a contract created between Eva and Anton.

On the other hand, re-using code that was made by the creator before the scope of their employment does not count as a breach of contract [2]. The movie, however, does not mention whether Anton created the algorithm before he was hired by Eva. Ultimately, one cannot determine whether this was a breach of contract without the essential information. A bigger issue, however, lies in the implications of the non-compete agreement.

Non-Compete Agreement

A non-compete agreement is a contract between an employer and employee that restricts the employee from directly competing against the employer in the same industry. A non-compete agreement enables the employer to strengthen the protection of trade secrets as it prevents a potential competitor from taking advantage over those secrets. [2]

Vincent and Anton become one of Eva's competitors when they left her company, breaching their non-compete agreement

Anton and Vincent quit Eva's company to work on the fiber optic cable project because they wanted to earn more money and eventually become successful in the high frequency trading industry. This violated the non-compete agreement since Anton is using the code that he provided for Eva during his employment in Eva's company to benefit themselves and eventually become her competitor. In addition to this, Anton and Vincent started working on the details of the project when they were still employed by Eva.

Non-Disclosure Agreement (NDA)

NDAs are a form of contract between employee and employer to keep business operations a secret from non-authorized groups. By keeping business operations a secret, the employer can gain competitive advantages as new technology or innovations that the employer is working on is kept a secret from competing firms. [3]

Vincent required all construction workers to sign a NDA to protect his secret project

In the movie, Vincent requires all of his workers involved in the project to sign a non-disclosure agreement. This mitigates the chances for the details of the project to be leaked to other stockbroker firms in the industry including Eva's company. Especially for trading firms, the effectiveness of high frequency trading depends on the speed of transactions. Vincent wanted to keep his project a secret so that he can gain a 1 millisecond advantage over other competitors. When the details of the project were discovered by Eva, she automatically decides to race against Vincent's project, which shows how important NDAs are in keeping business operations a secret.

When some of the workers decide to leave the project, Vincent threatens them to uphold their NDAs

Vincent's Two-Faced Nature

As a viewer, it is interesting to see Vincent's two-faced nature when it came to upholding contracts. On one side, Vincent thinks it is fine to violate his general employment contract and the non-compete agreement when he decided to start working on the fiber optic cable line project while he was still employed by Eva. On the other side, Vincent expects his workers to uphold the non-disclosure agreements they signed. In addition to this, Vincent also drags Anton along with him in his project, which leads Anton to violate his own contracts with Eva. According Virtue Ethics, what Vincent is doing is wrong because it violates the moral virtues of honesty. In order for Vincent to be successful and satisfied, Vincent should uphold all of his contracts.

Anton was convicted for being a "threat to national security", when paying a fine would have been enough to settle the conflict

Going Beyond

When Anton was arrested and interrogated by the FBI, he was accused by Eva for being a "threat to national security". Normally, violations of these employment contracts and agreements are resolved through lawsuits and fines [4]. This shows that Eva has gone beyond the penalties that should have been done. This could have been all avoided if Vincent and Anton did not violate the agreements they made with Eva. Eva was also in the wrong for accusing Anton for being a national threat because it was unnecessary and probably only served to suffice her anger. Because of her actions, she made Anton activate the malicious code that slowed her network down by 20 milliseconds, costing the company opportunities to make more profit (more in Computer and Network Security).

References:

Cover Photo: https://www.china-briefing.com/news/intellectual-property-china-laws-registration-procedures/

[1] United States Copyright Office, Works Made for Hire (United States Copyright Office, 2012), https://www.copyright.gov/circs/circ09.pdf (accessed September 28, 2021)

[2] Adam Hayes, Non-Compete Agreement, (IAC Publishing, 2021), https://www.investopedia.com/terms/n/noncompete-agreement.asp#non-compete-vs-non-disclosure-agreements (September 28, 2021)

[3] Khadija Khartit, Non-Disclosure Agreement (NDA), (IAC Publishing, 2021), https://www.investopedia.com/terms/n/nda.asp (September 28, 2021)

[4] Consequences of Breaking a Contract, (UpCounsel, 2020), https://www.upcounsel.com/consequences-of-breaking-a-contract#:~:text=Under%20the%20law%2C%20once%20a,if%20the%20breach%20never%20happened (accessed October 5, 2021)

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