Tuesday, May 17, 2016

Trade Secrets Extraordinary Provisions

Trade secrets are going to be dealt differently now that the President has signed into law the new Defend Trade Secrets Act (DTSA).  Through the bipartisan efforts of Sen. Orrin Hatch, R-Utah, and Sen. Choons, D-Del., DTSA is meeting the desired measure that has long been sought by businesses to address the delicate nature of intellectual property protection at home and abroad.  The importance cannot be overstated when the provision now allows federal civil claims for misappropriation of trade secrets.  This step undoubtedly heightens the impact of filing lawsuits under the Federal Economic Espionage Act.
DTSA will be considered as other concepts and notions of the intellectual property realm are considered, i.e., patents, trademarks, and copyrights.  By doing so, entities claiming trade secrets misappropriation will have more certainty in the process with the authoritative sphere now being a federal law.  DTSA will apply to products and or services, regardless if they are in commerce or are intended to for use in commerce.  The claimed pretext of use in commerce extends beyond interstate commerce into foreign commerce, availed by the Espionage Act.
While DTSA has now a federal platform, the potential claimants of trade secrets misappropriation will have a choice to either proceed in federal court or proceed in state court.  It is the discretion of the litigant to determine the most fruitful avenues considering potential protections and how foreseen motions would be handled.  Yet, with the federal option available, there will be at least a more settled approach going forward.  The damage award aspect of DTSA for the wrongful taking of a trade secret is accompanied with the seizure provision that will allow claimants to a seek seizure of their stolen trade secrets.  This mechanism has certain underpinnings.
The underpinnings of the seizure provision are based on demonstrating extraordinary circumstances that will require certain steps.  There is a requirement of filing an exparte application with an accompanying affidavit or verified complaint.  The litigant, overall, claiming misappropriation will be able to avail itself of a remedy heretofore not seen at the state level.  The initial requirement of demonstrating the inadequacy of the equitable relief under Rule 65 of the Federal Rules of Civil is required, however.  Additionally, the litigant must demonstrate irreparable injury with an outweighing balance of any legitimate interest of the possessor, with a demonstration of the nature of the misappropriation and a description of the trade secret, and showing that if notice was provided to the possessor the trade secrets would be made in any way inaccessible or otherwise destroyed.  The acquired trade secret will then be in the court’s custody, and if need be, the litigant can request that it be encrypted.

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