On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act of 2016, which among other things creates a federal civil right of action for trade secret misappropriation and provides immunity, under certain specific conditions, for whistleblowers who report an employer's violation of existing law. There are several key takeaways from the new Act:
Because most state trade secret acts are modeled after the Uniform Trade Secrets Act ("UTSA"), a substantial body of law already exists at the state court level interpreting the provisions of the UTSA, which find numerous parallels in the DTSA. It is expected that federal courts interpreting the DTSA will rely on this body of law already developed at the state level. However, different states interpret key provisions of the UTSA differently, and therefore a significant possibility exists that federal district court opinions interpreting the DTSA will mirror the lack of uniformity seen in state court opinions. A case seeking redress under both a state trade secret statute and also under the DTSA may encounter conflicting interpretations of the respective statutes. This conflict may be an advantage to plaintiffs, who need win under only one statute, not both.
It is hoped that the interstate and foreign reach of the DTSA will afford efficiencies to proceeding on trade secret claims in federal court, that use of the seizure mechanism will be rare and that the immunity statute will provide protection to whistleblowers while also protecting the trade secrets of employers. It remains to be seen whether the DTSA will hasten or inhibit the creation of a uniform body of trade secret law.
The DTSA applies to any act of misappropriation within the scope of the Act occurring on or after May 11, 2016. It is codified at 18 U.S.C. §1836(b) and amends the Economic Espionage Act, 18 U.S.C §1831 et seq.