The Defend Trade Secrets Act of 2016 serves to extend protections against trade secret theft to federal jurisdiction. The Act passed unanimously in the Senate and was approved in the House by a vote of 410-2. The new legislation was then signed into law by President Obama on May 11, 2016.
A trade secret consists of various types of information, and the measures to protect such. As it previously existed, trade secret misappropriation protection was governed by individual states’ laws. Because of this, even minor differences between those laws could present issues for plaintiffs seeking legal action against a party who has misappropriated information.
The Defend Trade Secrets Act of 2016 provides plaintiffs with the ability to file civil legal action in a federal court, if the misappropriated trade secrets in question are related to a product or service used in interstate or foreign commerce. The Act also creates an ex parte seizure process for certain situations wherein a court believes the that evidence of the misappropriation may be destroyed, moved, hidden or made inaccessible to the court.
This legislation may have implications on how your business structures protections for trade secrets, and how it prepares for potential misappropriation claims. This may involve updating internal business contracts to reflect the new provisions implemented by the Defend Trade Secrets Act of 2016, and assessing the current trade secret protections that you have in place. Likewise, if your company does not currently employ any preventative measures to deter trade secret misappropriation, now is the time to begin doing so.