On Wednesday, May 11, 2016, President Obama signed and enacted the Defend Trade Secrets Act of 2016 (DTSA), creating a federal civil cause of action for trade  secret  disputes. The Uniform Trade Secrets Act (UTSA) previously served as the model set of laws that 47 states implemented, with variations state­to­state. The DTSA will not  preempt  UTSA and state trade secret laws will remain  intact.

Proponents of DTSA think that the act increases predictability and uniformity nationwide, whereas inconsistencies existed amongst state courts in the past. One  possible  reason for this  is that federal courts are considered better equipped to handle complex technical issues because of their familiarity with patent and trademark cases.

Federal courts also have some familiarity dealing with trade secrets themselves because the DTSA is not entirely new, but  is actually an add­on to the Economic Espionage Act of 1996. The Economic Espionage Act provided for criminal prosecution by  the     Department  of  Justice for  trade secret misappropriation. This act, however, did not provide for civil actions. An owner of a trade secret may now file a federal civil lawsuit if a trade secret is misappropriated on or after the date of enactment and the trade secret is related to a product or service used, or intended for use, in interstate or foreign commerce.

The DTSA contains at least  one notable difference compared  to the UTSA: DTSA provides for civil seizure of property in "extraordinary circumstances." This change permits a court to issue an order for the seizure of property based on an affidavit or verified complaint. This provision has concerned some  parties   because  the   potential   for   abuse   is   apparent.  An 

allegation resulting in a seizure of property can cause tremendous business disruption, especially considering that large amounts of trade secret data could easily be replicated and distributed within an accused  organization.

There is no telling exactly how the federal courts will define these "extraordinary circumstances," but the statute  provides that it must be clearly apparent from specific facts and  that:

  1. An order issued pursuant to Rule 65 of the  Federal Rules of Civil Procedure or another form of equitable relief would be inadequate because the party to which  the order would be issued would evade, avoid, or otherwise not comply with such an order;
  2. An immediate and irreparable injury will occur if such seizure is not ordered;
  3. The harm of denying the request of the party requesting the seizure outweighs the harm to the  legitimate interests of the party against whom seizure would be granted and substantially outweighs the harm to  any third parties who may be harmed by such seizure;
  4. The requesting party is likely to succeed in showing that the information is actually a trade secret and  the  accused party misappropriated the  secret;
  5. The accused party has actual possession of the trade secret and property to be seized;
  6. The request describes with reasonable particularity the matter to be seized and, to the extent reasonable under the circumstances, identifies the location where the matter is to be seized;
  7. The accused party or persons acting in concert  with  such party would destroy, move, hide, or otherwise  make the information inaccessible to the court if the requesting party were to proceed on notice to such person; and
  8. The requesting party has not publicized the requesting seizure.

It may be a high burden to meet, but some think  that  the federal courts will look to other areas of intellectual  property law, such as aspects of trademark law that allow for seizure of counterfeit goods, when making decisions on whether to seize property based on extraordinary  circumstances.

Over the past several years, the landscape in intellectual property law has shifted and companies and persons must change correspondingly. With increased difficulty in obtaining software and business method patents, a federal trade secret statute may now provide greater incentive to keep these things secret. Moreover, organizations will need to be ever­more diligent in protecting its valuable trade secrets while also satisfying privacy laws such  as health  privacy  laws,  violations of which can bring other forms of liability.