President Signs Defend Trade Secrets Act

Knobbe Martens

On Wednesday, May 11, President Barack Obama signed into law the Defend Trade Secrets Act, which creates federal right of action for trade secret misappropriation.  The President thanked members of Congress for passing “a strong enforcement bill that allows us not only to go after folks who are stealing trade secrets through criminal actions, but also through civil actions, and hurt them where it counts in their pocketbook.”

The DTSA will open up the federal courts to trade secrets owners and help harmonize trade secrets law across the nation.  No longer will trade secrets litigants have to rely on state trade secrets laws for protection.  Federal district courts will have original jurisdiction to hear DTSA cases, but the law will not preempt any other state or federal laws.  With the expansion of trade secrets protection, businesses need to evaluate whether this type of intellectual property protection is well suited for their innovations and business information.  Certain innovations and business information may not be readily ascertainable by competitors and, now that there will be a federal trade secret misappropriation law, businesses may find trade secrets law a more attractive option for enforcing their intellectual property rights in such innovations and information.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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