This May, the Defend Trade Secrets Act (the “DTSA”) was signed into law, giving businesses federal–as opposed to just state–recourse in protecting certain intellectual property. Beforehand, trade secrets were protected only on a byzantine, state-by-state basis. Under some circumstances, a business might have access to federal resources under the Economic Espionage Act, which was limited to criminal actions. This new law, however, adds civil actions to the Economic Espionage Act.
The DTSA applies to trade secrets regarding any products or services used in interstate or foreign commerce and can be triggered by both actual and threatened misappropriation. Its remedies include injunctions, damages, and even civil seizure of property. (Keep in mind that the seizure of property will be granted only in rare and egregious situations.)
As a welcome balance to this bolstered protection for trade secrets, the DTSA contains a safe harbor for whistleblowers of a suspected violation of law “or as part of a lawsuit or other proceeding when the disclosure is made under seal.”
In light of the DTSA, all businesses–including yours–should adjust all confidentiality and non-disclosure agreements in two ways. First, be sure to include the DTSA’s whistle-blower immunity notice. Second, enhance the venue provisions in those agreements to include federal courts within the chosen jurisdiction for any potential disputes.
