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THE DEFEND TRADE SECRETS ACT- WILL IT AFFECT YOU?

On April 27, 2016 the US Congress passed the Defend Trade Secrets Act (DTSA). This Act now allows your business to file claims for trade secret misappropriation in federal court. Previously, legal recourse for these types of cases was only available under state law.

Companies can now also pursue appropriate remedies in federal court in order to recover from mishandled trade secrets. These remedies include: actual damages, restitution, injunctive relief, exemplary damages, ex-parte seizure order, and attorney’s fees.

Key DTSA Provisions

Ex-Parte Seizure Order: under this new remedy, a company who is worried that their trade secrets will be misappropriated can take steps to get the government involved. The government can then seize the misappropriated trade secrets before the defendant receives notice of the lawsuit. These kinds of seizures are subject to limitations, but this remedy will provide greater protections for businesses.

Immunity Provision: this provision protects individuals for disclosing a trade secret if it’s made to an attorney or a government official (in confidence), and is made with the purpose of reporting a violation of the law.

Next Steps for Businesses

  • Review employee contracts that deal with trade secrets or other confidential information
  • Provide clear definitions of what constitutes as a trade secrets
  • Ensure that the immunity provision (see above) is compliant with the language in DTSA.
  • Employers have an affirmative duty to give notice of the immunity provision to their employees.
  • Implement secrecy measures and policies to protect your trade secrets

If you have any questions about your obligations as an employer, please contact us at info@mitzelgroup.com or reach out to your Mitzel Group, LLP attorney directly.