In May of this year, the country marked the first anniversary of the enactment of the Defend Trade Secrets Act. The intent of the measure was to give companies an expanded menu of ways to protect their secrets against misappropriation by opening the door to federal court.
Prior to the DTSA, companies in California typically had to bring a trade secret claim through state courts under the auspices of the Uniform Trade Secrets Act. Each participating state adopted language based on the UTSA, perhaps tweaking provisions to suit their unique needs. That made it possible to mount a case across state lines, obviously important in our very mobile age, but it also could require going through multiple courts – prompting some legal observers to recall the adage, “Too many cooks in the kitchen.” Pressing a case could be time consuming and costly.
What did the DTSA do?
Besides making it easier to file a trade secret civil action, the DTSA provides for ways to stop the secrets from being leaked. Plaintiffs can ask a court to order a seizure of property to prevent loss of a competitive advantage. However, as at least one anniversary review of the law notes, seizure orders are rare. Courts tend to opt for temporary restraining orders unless conditions call for more extreme action.
Another feature of the law is that it includes immunity from claims if the defendant is a whistleblower. That is, if the person’s sole purpose for misappropriating a secret is to report suspected illegal activity, he or she is protected. The scope of that protection has not been significantly tested so far.
The important takeaway from this post is that enactment of the DTSA means new legal options exist for companies needing to protect intellectual property in the form of trade secrets. Determining the best legal course to pursue depends on getting a thorough assessment of your case from an experienced attorney.