President Signs Defend Trade Secrets Act Into Law

Congress just gave trade secret owners a new way to defend their secret sauce. The Defend Trade Secrets Act (DTSA) was signed into law on May 11. An extension of the federal Economic Espionage Act, DTSA allows trade secret owners to bring a civil action in U.S. district court seeking relief for trade secret theft, also known as misappropriation.

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Unlike patents, trademarks and copyrights, trade secrets were not protected by federal law, but rather a patchwork of state statutes. Highlights of the DTSA include:

  • Creating an additional federal court jurisdiction with appeals going to the federal circuit courts, meaning plaintiffs can file in state and federal court or a combination of both
  • Guidance on basic definitions involved in trade secret law modeled after the Uniform Trade Secrets Act
  • An ex parte seizure provision that allows trade secret owners to seek an order for seizure of goods if necessary to prevent dissemination of a trade secret
  • Remedies, such as an injunction and damages, as well as attorney fees rewards in cases where willful and malicious intent is proven
  • Immunity for whistleblowers who disclose a trade secret to a government official due to concerns over law violation

Employers have some homework to do regarding the whistleblower provision. They must notify employees of the new provision in “any contract or agreement with employee that governs the use of a trade secret or other confidential information.”

See our other articles on trade secrets, such as: Trade Secrets Become More Significant After the AIA or Protection of Trade Secrets in the Digital Age

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