A New Federal Trade Secrets Law for the New Year?

A New Federal Trade Secrets Law for the New Year?

Earlier this month, the U.S. Senate Judiciary Committee considered an important piece of intellectual property legislation. The Defend Trade Secrets Act (DTSA) aims to modernize and streamline the country’s trade secret laws by creating a federal claim for trade secret misappropriation.

Senators Orrin Hatch (R-UT) and Chris Coons (D-DE) and Representatives Doug Collins (R-GA) and Jerrold Nadler (D-NY) introduced the bi-partisan legislation. Despite broad support, the current bill is the third time lawmakers have attempted to pass federal trade secret legislation, which suggests the bill may still face an uphill battle.

Why a new federal trade secrets law might be put into effect

As our intellectual property lawyers have previously highlighted on this blog, U.S. businesses lose billions of dollars every year due to trade secret theft at the hands of employees, competitors, and even foreign governments. While victims of trade secret misappropriation can bring civil suits under state law and the federal government can pursue criminal sanctions under the Economic Espionage Act (EEA), trade secrets do not receive the same level of federal protection as other forms of intellectual property.

The Defend Trade Secrets Act

The Defend Trade Secrets Act is intended to provide uniform remedies for misappropriation of trade secrets. The statute allows civil claims for trade secret misappropriation to be filed in federal court and also provides for injunctive relief to prevent any actual or threatened misappropriation of trade secrets. The statute of limitations would be five years, and treble damages and/or attorneys’ fees would be available in cases of willful and malicious misappropriation.

Sponsors of the trade secret bill include Sens. Orrin Hatch, R-Utah, Chris Coons, D-Del., Jeff Flake, R-Ariz., Dick Durbin, D-Ill., Thom Tillis, R-N.C., and Tammy Baldwin, D-Wisc., along with Reps. Doug Collins, R-Ga., and Jerrold Nadler, D-N.Y. In announcing the bill, Sen. Hatch stated:

The Defend Trade Secrets Act of 2015 establishes a uniform standard for what constitutes trade secret theft and will give U.S. companies the ability to protect their trade secrets in federal court. I hope Congress will act quickly to pass this bipartisan, bicameral bill that will help American companies maintain their competitive advantage both here and abroad.

Several large companies and business organizations have already voiced their support for the bill via a letter of support. Signatories include the Association of Global Automakers, Inc., Eli Lilly and Company, General Electric, Honda, IBM, NIKE, the National Association of Manufacturers, and the U.S. Chamber of Commerce.