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Feds Open Up Trade Secret Litigation Floodgates- Part 1

Posted by James McCarthy, Esq. on May 31, 2016

On May 11, 2016, President Obama signed into law a new private cause of action for civil litigation under the Economic Espionage Act of 1996 known as the “Defend Trade Secrets Act of 2016” (“DTSA”). Previously, trade secrets were protected under individual State law1. The new law now opens up federal courts to plaintiffs to litigate trade secret claims and obtain injunctions, prevent disclosure and seek economic damages for trade secret violations similar to those available for other intellectual property such as patents and copyrights. Trade secrets involve varied types of legally protected information including computer software and customer lists. One unique feature of the new law involves an ex parte “seizure” provision that allows trade secret owners to actually petition the court in advance of a lawsuit without notice to the alleged offender to obtain a federal order to seize servers and other tangible property involved in the alleged illegal activity. Economic damages under the DTSA are meant to serve as a deterrent with severe punitive features including double damages available to successful litigants. 

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Topics: DTSA, Litigation

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