Trade Secrets protection has become more strategic with legal teams becoming more involved in the process to achieve the best outcome for trade secret owners. With the boom of technology, these owners are realizing that their secrets have become easier to obtain, infiltrate, and even take.
Despite this, almost half of senior corporate executives surveyed throughout the world have not implemented strategic measures to protect their trade secrets.
In the United States, Congress introduced the Defend Trade Secrets Act (DTSA) in 2016, removing the challenges to a trade secrets complaint in the U.S. federal courts. Before the DTSA, companies could only pursue trade secret litigation in federal courts under diversity jurisdiction (if the litigants were from different states) or pendent jurisdiction (where there was an independent federal cause of action that related to the trade secret misappropriation).
Finnegan partner John Williamson told World Intellectual Property Review that these exceptions werebroad in practice,” meaning that many seeking redress for trade secret misappropriation had no choice but to sue in state court.
John added, “The DTSA was a gamechanger for many companies. After 2016, civil cases brought in federal court could be brought under the new substantive federal law or both federal and state law as two separate causes of action if the trade secret owner desired—a common practice.”
“Secondly, the plaintiff no longer had to establish diversity or pendent jurisdiction of the federal court because the statute gave a direct federal cause of action for trade secret misappropriation that involved interstate commerce.”
John saidcourts are seeing a marked rise in the number of trade secrets cases over the past six years as the impact of the DTSA reverberates.
“There has always been an active trade secrets docket in both state and federal courts, even prior to 2016. But we saw a clear increase in the number of cases filed in federal court shortly after the DTSA passed in 2016. This might be attributable, in part, to a renewed awareness of the cause of action given the publicity that the DTSA received.”
He adds that for some, the now smoother federal route can be a much quicker way to secure an injunction.
“Federal courts are more familiar with a uniform approach to preliminary injunctions and motions for temporary restraining orders. And some federal courts are very fast. So a party can potentially get relief under the Federal Rules of Civil Procedure quickly in a federal court, whereas in some state courts, this may not be the case. So the 2016 law provided both a new, uniform, federal substantive law of trade secrets and a different, arguably easier, procedural path to assert claims in federal court.”
Read “A Game of Secrets”
