Federal litigation is finally catching up to the rapid evolution of technology. In the past, attorneys relied upon state legislation and state courts to protect intellectual property. Now, however, that has changed with the passage of federal legislation designed to protect against trade-secret misappropriation.

The “Defend Trade Secrets Act of 2016” (“DTSA”) was passed and ratified on May 11, 2016. It allows for an action to be filed for misappropriation that occurs after May 11, 2016. The DTSA provides a federal forum for litigation and strengthens the Uniform Trade Secrets Act, which had been adopted to varying degrees in 48 states.

The DTSA expands state legislation and allows ex parte seizure in circumstances where a party may be likely to “destroy, move, hide, or otherwise make such matter inaccessible to the court.” This provision may be particularly helpful for software developers who may otherwise have difficulty proving trade-secret misappropriation. While the seizure itself can be executed immediately, a hearing in court may take up to seven days after the execution of said order.

There are other differences in the language of the DTSA that are important to software developers filing suit under the DTSA. First, the DTSA does not provide injunctive relief under the inevitable disclosure doctrine. Second, while the DTSA does not preempt any current existing state law, the broad language of the DTSA allows plaintiffs to file federal suits without having to describe the trade secret with particularity. Additionally, the DTSA calls for the “owner” of the trade secret to bring the action. Because the DTSA is different than many state requirements, it is important to carefully compare both laws to determine the most appropriate venue for litigation.

Overall, the DTSA is a welcome addition to federal civil causes of action available to intellectual property owners. It attempts to help codify a confusing body of federal intellectual property law and provides a new venue for plaintiffs to bring suit.

For more information on this topic, please visit our Trade Secret Protection services page, which is part of our Technology & Data practice.  

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the trade secret protection law firm and its trade secret protection attorneys can be found at www.klemchuk.com.

Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.

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