US Federal Trade Secret Laws Approved by Congress: Next Step toward Uniform Trade Secrets Enforcement

On April 27, 2016, the US House of Representatives passed the Hatch-Coons Defend Trade Secrets Act of 2016 (DTSA), which modifies the Economic Espionage Act by creating a private civil right of action for trade secret misappropriation.  The DTSA, which has been publically supported by the Obama administration, now goes to the White House for signature.

The purpose of the DTSA is to harmonize trade secrets law across the US by opening up the federal courts to trade secrets owners.  As a result, trade secrets litigants will no longer be limited to protections available under state trade secrets laws, which vary from state to state.  Federal district courts will have original jurisdiction to hear DTSA cases, but the DTSA will not pre-empt any other state or federal laws.  Uniform trade secret laws across the US may encourage businesses to consider trade secrets law as an option for enforcing their intellectual property rights in the US. 

The DTSA includes several notable provisions to benefit trade secret owners.  For example, it permits:

• Civil seizure - the DTSA provides a procedure whereby a court can, upon request from the plaintiff and in extraordinary circumstances, seize a defendant’s property without notice.  This extraordinary measure is available to prevent key evidence from being destroyed, moved, or hidden from the court.
• Injunction - upon finding liability, a court may issue a nationwide injunction, on reasonable terms, to prevent any actual or threatened trade secret misappropriation.

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