Ch 6: Trade Secrets

President Obama Signs Federal Defend Trade Secrets Act

By David Enzminger & Daniel Fazio
May 13, 2016

 IP Watchdog

On May 11, 2016 – after years of bipartisan negotiation resulting in widespread support from both sides of the political aisle, as well as from the business community – President Obama signed the Defend Trade Secrets Act of 2016 (DTSA), the long-proposed legislation that establishes a federal trade secrets law.

Before the DTSA, companies seeking civil remedies for misappropriation of their trade secrets were generally limited to state law enforcement. Although 48 states have adopted the Uniform Trade Secrets Act (UTSA) in some form, there are significant differences among the states in the application of the UTSA. Moreover, companies were usually limited to litigating in state court, except in cases where federal diversity jurisdiction exists. Some jurisdictions, but not others, had allow federal courts to hear trade secret claims along with claims under the federal Computer Fraud and Abuse Act where employees exceeded their authorization to access trade secret materials from their company computers. In short, there was no consistent nationwide scheme for enforcement of trade secret protection.

The DTSA amends the federal Economic Espionage Act of 1996 to create, for the first time, a federal civil remedy for the misappropriation of trade secrets.


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