The Newly Enacted Defend Trade Secrets Act Increases Federal Protection for Trade Secret Misappropriation
On May 11, 2016 President Obama signed the Defend Trade Secrets Act (DTSA), a bill that expands a federal law designed to protect intellectual property.
The DTSA creates a federal private right of action for trade secret claims that will allow private companies to sue in federal court for theft of trade secrets. Some additional features of the new law include a provision for civil seizure of property early in the proceedings to prevent dissemination of stolen trade secrets, as well as the ability to restrict a former employee who joins a competitor in certain circumstances. Other remedies available under the law include injunctions to prevent actual or threatened misappropriation and damages for actual losses and unjust enrichment caused by misappropriation.
The DTSA does not eliminate or change current state law regarding trade secrets, nor does it change federal criminal trade secret theft laws. Instead, it provides companies the option to pursue civil trade secret misappropriation claims under federal law and in federal court and seeks to establish a uniform national approach to civil trade secret claims. The DTSA, which goes into effect immediately, was widely supported in Congress, passing the Senate 87-0 and the House 410-2.
This new trade secret act may affect businesses in a variety of ways including intellectual property rights and employment issues. We encourage you to contact our intellectual property or employment attorneys for more information, or if you have questions about how this new law affects you or your business.