For the third consecutive year, Congress introduced legislation to create a civil federal cause of action for trade secret misappropriation. Unlike previous years, the identical Defend Trade Secrets Act (“the DTSA”) was introduced in both the Senate and House of Representatives. The Senate passed an amended version of the DTSA by a vote of 87-0 on April 4, 2016. The House passed the revised bill by a vote of 410-2 on April 27, 2016. The president signed the bill and it became law on May 11, 2016.

The DTSA was created in response to the increasing importance of trade secrets in today’s economy and the increasing theft of trade secrets as global trade expands and critical data become digitized. It has been estimated that trade secret theft exacts a cost on U.S. companies of between $160 and $480 million each year. The DTSA seeks to remedy shortcomings with existing criminal and state laws, including lack of federal resources to investigate trade secret theft, and variations and limitations in state laws that make them not wholly effective in a national and global economy.