The DTSA After One Year: Has the Federal Trade Secrets Law Met Expectations? -
On May 11, 2017, the Defend Trade Secrets Act (DTSA) – the law that created a Federal cause of action for trade secret misappropriation – celebrated its first birthday. The law was the result of years of negotiation between stakeholders concerned with balancing improved protection of corporate intellectual property with protecting market competition, employee rights and mobility, and individual privacy. The DTSA reflects those negotiations with three basic elements: a civil cause of action modeled on (but not identical to) the state-law Uniform Trade Secrets Act (UTSA), an ex parte seizure provision to prevent threatened destruction or dissemination of secrets, and whistleblower protection provisions. From the first year of enforcement, it appears that the DTSA got the balance right with some provisions, may need to be tweaked with others, and has yet to render clear results in some.
DTSA Claims Have Uniformly Been Paired with UTSA Claims -
The DTSA was originally proposed as a necessary alternative to the UTSA because of the burden of obtaining discovery (especially prompt discovery for temporary restraining order proceedings) from other states and the lack of uniformity in enactment of the UTSA among the states. That is not how the DTSA has been used. Instead, DTSA and UTSA claims have been pled together in almost every case, with the UTSA claims usually falling only under the court’s supplemental jurisdiction. That is, rather than being used as an alternative to UTSA claims, the DTSA has supplied an easy route into Federal court with both Federal and State claims. Notably, this has led to a convergence of the DTSA and UTSA as interpreted in a district court, diminishing some of the uniformity of application of the DTSA across districts.
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