After years of debate and multiple versions proposed, withdrawn, revised and debated by both Houses of Congress, legislation that would for the first time federalize trade secrets law is headed to the White House for signature. The 2016 Defend Trade Secrets Act passed the Senate 87-0 on April 4, 2016 and 410-2 in the House on April 27, 2016.
Essential components of the new law include:
• The owner of a trade secret that is misappropriated may bring a civil action in federal court if the trade secret is “related to a product or service used in, or intended for use in, interstate or foreign commerce”
• In "extraordinary circumstances," a court may issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action
• A court may grant an injunction to prevent actual or threatened misappropriation or to require affirmative actions be taken to protect a trade secret
• Damages can be awarded for actual loss or unjust enrichment or a court can impose a reasonable royalty
• For willful and malicious misappropriation, a court may award double damages
• In appropriate circumstances, a court may award attorneys' fees to the prevailing party
• Federal district courts will have original, but not exclusive, jurisdiction of civil actions brought under this section
• A civil action brought under the Act must be commenced no later than 3 years after the date on which the misappropriation was discovered or should have been discovered
Once the legislation is signed into law, we will publish a more comprehensive study. Stay tuned.
