Trade Secret Law Update (House Passes the Defend Trade Secrets Act of 2016)April 28, 2016

Are You Ready? The Defend Trade Secret Act is Coming!

Today, the House of Representative passed the Defend Trade Secrets Act (DTSA) of 2016 by a vote of 410-2, as previously anticipated.The Senate already passed the DTSA on April 4th. The next step for the DTSA to become law of the land is the signature of the President, who issued a statement earlier (available here) to indicate his full support for this legislation.

The DTSA will be codified as 18 U.S.C. ┬ž 1836(b) and the most pertinent part recites: “An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The DTSA will establish a single national standard for trade secret misappropriation with transparent procedural rules, and is intended to go into effect on its day of enactment and apply to any trade secret misappropriation that occurs on or after the DTSA’s enactment date.

In addition to creating a single, federal cause of action for trade secret misappropriation, the DTSA also creates a new system through which a petitioner can seek seizure of trade secret material wrongfully in the possession of another, in order to prevent disclosure.  The DTSA is not intended to preclude state causes of action for trade secret misappropriation or unfair competition, but rather to establish uniform procedures and provide a potentially more readily available venue in federal court for resolving trade secret issues. 

In the earlier Filewrapper┬« posts relating to the trade secrets, we have discussed the role and value of trade secrets (available here), described how the value of trade secrets are commonly assessed (available here), and provided an overview on the current protection schemes available for trade secrets in the U.S. (available here).The fourth posting provides a discussion on how enforcement and maintaining protection of trade secrets may be enhanced in the event the legislation becomes law of the land (available here). The fifth posting answers the question “Do I have a trade secret, confidential information or patentable subject matter?”(available here).


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