IMPACT OF THE DEFEND TRADE SECRETS ACT IN THE US
CD: Could you provide some insight into how the Defend Trade Secrets Act (DTSA) has been received since it was signed into law in May 2016? How does it compare with the protection afforded by the Uniform Trade Secrets Act (UTSA) adopted by most states (New York and Massachusetts aside)?
Cooke: The DTSA largely has been welcomed by business communities. It is anticipated that the DTSA will be a significant tool to better protect some of the most valuable business assets of the modern economy – information. This is particularly important given the ease and speed by which complex and voluminous information can be copied and distributed globally. Previously, many businesses found existing legal remedies insufficient to protect their trade secrets in the event of a violation. As with any new major law, the DTSA’s shortcomings may not come to light fully for several years. However, yellow flags have already been raised by some on whether the injunction and seizure remedies might tilt too much in favour of the alleged victim, and whether the DTSA favours larger entities to the detriment of smaller businesses and individual employees.
Torrey: The DTSA passed both houses of Congress with overwhelming support and has received widespread attention in business and legal commentary following its enactment. It is the first federal law in the US to create a civil cause of action for trade secret theft, allowing litigants access to federal courts and providing a statute nationwide to protect trade secrets uniformly. It amends the Economic Espionage Act, which provides criminal prosecution for trade secret theft. The DTSA defines trade secrets in a similar fashion to the UTSA state laws and offers some of the same remedies.
Jan-Mar 2017 issue
Manatt, Phelps & Phillips, LLP