Understanding the Defend Trade Secrets Act of 2016

| Oct 24, 2016 | Trade Secrets

This was an important year for trade secret legislation. Back on May 11, the Defend Trade Secrets Act (DTSA) of 2016 was signed into law. The bill, which allows for federal jurisdiction in matters regarding trade secret theft, was passed unanimously in the Senate and ratified by the house 410-2. 

The DTSA is the most significant trade secret reform legislation to occur in decades. It allows for greater federal involvement in trade secret protections. If you or your company have acquired trade secrets, it is important to understand the new legislation so you can protect your intellectual property.

With the DTSA, those with claims of trade secret misappropriation may seek litigation in the federal courts. This is particularly beneficial for trade secrets used in interstate or foreign commerce. Prior to this, all trade secret litigation was limited to the state court system. 

In addition to the right to federal court action against misappropriation, the DTSA also provides for the following:

  • Statute of limitation for legal action up to three years 
  • Ex parte seizure orders in some cases to preserve evidence or as a remedy to trade secret misappropriation
  • Stronger trade secret protections during civil and criminal litigation, including rights to maintain confidentiality of a trade secret
  • Robust remedies for misappropriation, including recovery of the actual loss and reasonable royalties for the unauthorized disclosure
  • Whistleblower protections for reporting suspected trade secret violations
  • Digital protection for trade secrets
  • Increased criminal penalties for misappropriation of trade secrets

As with any intellectual property issue, the best defense against theft is to have solid trade secret protections in place for your company. When litigation is necessary, it is also necessary to obtain representation from an experienced intellectual property attorney.