Defend Trade Secrets Act of 2016 ("DTSA"), which went into effect on
May 11, 2016, federalizes trade secrets law. For the first time, now, employers
can file civil lawsuits for trade secrets theft under the federal Economic
Espionage Act ("EEA"). Before the DTSA, prosecutors could bring
criminal cases under the EEA for trade secrets misappropriation, but private
civil cases had to be filed under state law. Now, U.S. district courts have
original jurisdiction over civil causes of action for trade secrets theft.
goal of the DTSA is to unify trade secrets law. Although the Uniform Trade
Secrets Act provided a framework for states to follow, there were still
state-to-state differences in how trade secrets law was applied. However, the
DTSA supplements rather than preempts state laws. State trade secret laws now will
co-exist with the DTSA. Another goal of the DTSA is to provide easier access to
federal courts, which will be helpful particularly as to international and
cross-state cases as well as complicated technological matters.
most controversial provision of the DTSA allows courts to issue ex parte
seizure orders to prevent the dissemination of a trade secret. This extreme
remedy allows a trade secret owner, "in extraordinary circumstances,"
to seize property of a competitor without providing any notice. The court
obtains custody of the property until further court determination. To prevent
abuse of this remedy, the DTSA allows parties to seek damages if they are
harmed by a wrongful or excessive seizure. This seizure provision will serve as
a new powerful tool in trade secret litigation as there is no comparable remedy
under any state's trade secrets laws.