In a previous post, we took a brief look at California’s Uniform Trade Secrets Act, and some of the basic features it provides to businesses in terms of trade secret protection. As we noted last time, businesses rather recently gained the ability to enforce trade secrets under federal law, with last year’s passage of the Defend Trade Secrets Act.
The Defend Trade Secrets Act provides businesses the ability to pursue a federal claim for trade secret misappropriation. Prior to the law’s passage, trade secrets could only be enforced in federal court when certain jurisdictional requirements applied, but the law changed that by creating a federal cause of action for trade secret misappropriation.
The definitions and remedies under the Defend Trade Secrets Act are similar to, though not the same as, those under California law. As under California law, trade secrets are defined as any type of information the owner has taken reasonable measures to keep secrets so as to benefit from its economic value. The federal law also defines misappropriation as the improper acquisition, disclosure or use of a trade secret without consent.
Remedies under the Defend Trade Secrets Act include: injunctions to prevent actual or threatened misappropriation, including actions to protect trade secrets to the extent possible; court orders for royalty fees; monetary damages; punitive damages; and attorney fees. The law also provides immunity for employees who report trade secret misappropriation to government authorities.
Although there are many similarities between state trade secrets protection laws and the Defend Trade Secrets Act, there are certain differences as well. These differences need to be taken into consideration not only in enforcing trade secrets, but also in establishing clear policies and procedures to effectively protect against misappropriation. We’ll say a bit more about this in our next post.