Defend Trade Secrets Act (DTSA)

According to Lex Machina’s 2018 Trade Secret Litigation Report, the number of trade secret cases pursued in U.S. federal courts has increased rapidly since the 2016 enactment of the Defend Trade Secrets Act (DTSA), which granted federal court subject matter jurisdiction over claims raised under the Act. Last year provided a number of interesting precedential decisions on various topics within the realm of trade secrets law, many of which will no doubt shape litigation tactics (and expectations) going forward. One decision of particular note came from the Federal Circuit Court of Appeals addressed to the issue of whether unjust enrichment claims were entitled to a jury determination.  Although the case did not specifically deal with claims raised under the DTSA, it nonetheless could impact who is entitled to determine certain types of monetary remedies requested in trade secret cases.

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On May 11, 2016, President Obama signed the Defend Trade Secrets Act of 2016 (DTSA), which amended the Economic Espionage Act of 1996 to create a federal civil remedy for trade secret misappropriation. lockThe DTSA governs misappropriations occurring after the effective date of May 11, 2016.

Although trade secret theft has been a federal crime since 1996, civil claims for trade secret misappropriation were almost always governed by state law. A corporation unable to establish a basis for federal jurisdiction was thus limited to state court. Although every state but two has adopted a variation of the Uniform Trade Secrets Act, these statutory variations and differing court interpretations created uncertainty in the application of trade secret law, an area of growing importance for companies increasingly dependent on electronic security.


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