Defend Trade Secrets Act Revolutionizes Federal Trade Secrets Practice

By: John R. Brumberg

On Wednesday, May 11, President Obama signed the Defend Trade Secrets Act (“DTSA”) into law. The DTSA revolutionizes trade secrets practice at the federal level. Its passage will likely multiply the number of trade secrets cases litigated in federal court.

We provide a few highlights:

  • First, the DTSA allows the owners of trade secrets to bring a civil action for misappropriation in federal court. Thus federal jurisdiction—premised on federal law—now exists for trade secrets claims. Before the DTSA, trade secret misappropriation was mainly a matter of state law, as Pennsylvania had adopted its own version of the Uniform Trade Secrets Act.

The DTSA subjects claims to a three-year statute of limitations, while plaintiffs can secure punitive damages of up to two times the amount of actual damages in the event of willful and malicious misappropriation. Likewise, reasonable attorney’s fees are available for the prevailing party if the trade secret was willfully and maliciously misappropriated or if the claim of misappropriation was made in bad faith.

  • Second, the DTSA provides the remedy of ex parte seizures. This allows a seizure to occur without advance notice to defendants and is the DTSA’s most controversial provision. Intended as a way to stop the dissemination of a trade secret, especially overseas, before its value has been lost through public disclosure, seizure is available only in extraordinary circumstances.
  • Third, the DTSA gives immunity to whistleblowers who disclose trade secrets to the government or in a sealed court filing. Employers must now provide notice of the DTSA’s immunity to their employees in any employee contract that governs the use of a trade secret or other confidential information. Importantly, the DTSA bars employers that do not provide this notice from recovering the exemplary damages or attorney’s fees otherwise available under the Act.
  • Fourth, the DTSA explicitly clarifies that “improper means” “does not include reverse engineering, independent derivation, or any other lawful means of acquisition.

For more information, please contact John R. Brumberg at JRB@Pietragallo.com.

News & Events

Related News

July 26, 2019

Several members of the Pietragallo Gordon Alfano Bosick & Raspanti, LLP Law Firm volunteered this weekend at the Mission of Mercy Pittsburgh event. Mission of Mercy Pittsburgh, is a free, two-day dental clinic for under-served people living in Pittsburgh and the surrounding area, many of whom are from working families who do not have access… Read more »

Read More

Upcoming Events

March 29, 2020

On Sunday, March 29, 2020, at the Health Care Compliance Association’s 24th Annual Compliance Institute in Nashville, Tennessee, Michael A. Morse will present to attendees “The False Claims Act Update.” During this presentation, attendees will: Understand the fundamentals of liability, damages and procedure under the FCA Review critical recent court interpretations of the Supreme Court’s… Read more »

Read More
March 30, 2020

Pamela Coyle Brecht will be presenting at the Health Care Compliance Association’s 24th Annual Compliance Institute in Nashville, Tennessee on March 30, 2020. The title of Ms. Brecht’s presentation is, “Healthcare Private Equity, Moving Into the Government’s Crosshairs.” Private equity (PE), through mergers and acquisitions, has moved into the healthcare space in a very big… Read more »

Read More
View More News & Events