Insider trading involves using non-public information about corporation(s) in trading securities. This trade can generally be a purchase, sale, or both. Nevertheless, non-purchases and non-sales of securities following an awareness of an inside information are also insider trading. Trade Secrets are also what give companies an advantage over their competitors. This is part of the foundation of any company.

One of the most important aspects of property rights in insider trading is the control function of property rights. It is the nature of a property right to enable individuals to exercise control over goods they own. To have a property right to a good means to control this good. It means to control the use, the allocation, and the disposal of goods owned. In the unhampered market, this control is exclusive and absolute. Today’s corporations also are moving beyond traditional types of property rights known as intellectual assets.

The advantages of property rights argument are that the society generally benefits from the willingness of companies to innovate; and that patent, trade secrets, and copyright laws encourage a free flow of information (Boatright, 2003). However, without the existence of legal protection for property rights, Trade secrets will permit monopoly as long as a corporation succeeds in keeping key information out the hands of competitors. Likewise, it leads to patent law manipulation, which raises the cost the public pays for the product of patent holder in a specific time period. Companies may take out a patent, or buy someone else's patent, in order to inhibit others from applying the ideas. For example, from its beginning in 1875, AT&T collected patents in order to ensure its monopoly on telephones. http://www.uow.edu.au/arts/sts/bmartin/pubs/95psa.html

The fairness argument is against those who reap where they’ve not sworn or harvest from those who have sown because it puts companies at unfair competition. The most familiar example of unfair competition is trademark infringement, use of confidential information by former employee to solicit customers, and misappropriation. This involves the unauthorized use of an intangible assets not protected by trademark or copyright laws. The weakness of this argument is that there is difficulty in imposing legal restraints on employees after they leave regarding to property rights and competition. Non-competition agreements sometimes have hidden meanings not clearly disclosed; and are mostly for the benefit of the employer and intrude or inflict burden on an employee’s fundamental right to survive and make a living, either in subsequent employment or self-employment. There is also a problem of justification for restricting employees unfairly in this way.

References:

Boatright, John R. (2003). Ethics and The Conduct of Business. Upper Saddle River:   
                  Prentice Hall

http://www.uow.edu.au/arts/sts/bmartin/pubs/95psa.html