Trade Secrets Summoned to Protect AI Amid Noncompete Uncertainty

A Texas federal judge’s order halting enforcement of the Biden administration’s sweeping ban on noncompete agreements has, at least temporarily, cleared a complex path to safeguarding breakthroughs in artificial intelligence.

AI entrepreneurs have turned to trade secrets law and noncompete agreements in recent months to protect their proprietary artificial intelligence systems, and the products of AI-backed discoveries. But that strategy is threatened if the Federal Trade Commission’s ban on most noncompetes is allowed to go into effect, said Joshua Rich, partner and general counsel at McDonnell Boehnen Hulbert & Berghoff LLP.

“That’s why the combination of not being able ...