Saturday, October 27, 2018

The California Law Origin of Silicon Valley

New Yorker – "Did Uber Steal Google’s Intellectual Property?"

"At the time of the Shockley betrayals (1957), other regions were much better positioned than Silicon Valley to become the tech industry’s breadbasket. Route 128, a beltway around Boston, was home to so many universities and pioneering computer firms that it soon became known as America’s Technology Highway. But by the nineteen-seventies Route 128 had been overshadowed by Northern California. Economists later suggested that the Valley’s culture of betrayal was a major reason for its success. Massachusetts’ laws made it difficult for employees to join rival companies or create new businesses. Engineers in Boston were typically forced to sign non-compete agreements that required them, if they quit, to wait at least a year before joining a competitor or creating their own firms. But in California non-compete agreements were illegal. That prohibition had been inserted into the state’s commercial code almost by accident, in the eighteen-seventies, when California lawmakers—seeking to save time—virtually copied a set of statutes that had been proposed (and then rejected) by New York’s legislature. When California’s early legislators outlawed “every contract by which anyone is restrained from engaging in a lawful profession,” none of them could have foreseen that, a century later, their decision would transform the global economy."

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