States have long provided protection for trade secrets, with most having enacted a version of the Uniform Trade Secrets Act (“UTSA”). The UTSA supplies a framework for imposing liability with respect to the misappropriation of trade secrets. Now, after several years of attempts, the federal government is close to enacting its own version of civil trade secret protection: the Defend Trade Secrets Act of 2016 (“DTSA”).
The DTSA was introduced in the Senate with three considerations in mind: 1) theft of trade secrets occurs globally, including in the United States; 2) theft of trade secrets harms companies and employees; and 3) the federal Economic Espionage Act of 1996 already provides for criminal sanctions for trade secret theft.
The DTSA would amend the federal criminal code to create a civil cause of action for misappropriation of trade secrets. Under the new law, a trade secret owner could seek relief for trade secret theft related to a product or service in interstate or foreign commerce by filing a civil action in federal court. Remedies established by the DTSA would include injunctive relief, damages, and a seizure order to prevent dissemination of the stolen trade secret. A five year statute of limitations from the date of discovery of the trade secret theft would provide a long time to file an action after the damage has been done.
The DTSA just passed the Senate by a vote of 87-0, so its success or failure now depends on the House. Stayed tuned for more if the DTSA is enacted.