Time to Amend the Defend Trade Secrets Act | Beck Reed Riden LLP
Episode 22 of Fairly Competing is out!
In 2016, Congress passed the Defend Trade Secrets Act (the “DTSA”). The vote was unanimous in the Senate and 410:2 in the House. President Obama signed it on May 11, 2016.
Codified at 18 U.S.C. § 1836, et seq., the DTSA created a federal private right of action for trade secret owners to sue for the misappropriation of their secrets.
But, as co-host John Marsh has pointed out, “the DTSA is far from perfect. Like the Uniform Trade Secrets Act on which it was based, the DTSA can be improved as trade secret law evolves.”
There are certainly plenty of people engage in culpable, willful misappropriation of trade secrets. The DTSA was designed to address that.
But others get caught up in the DTSA’s enforcement mechanism far longer than they should be.
Many defendants (typically former employees) are either wrongfully accused of taking information that they did not take, or are accused of taking information that they did take, but that they had not intended to take or even realized they took. For example, employees often forget that they have company information on thumb drives they used for work, or in their email, or backed up on personal devices as part of routine computer or cellphone backups.
There are also plenty of employees who made a mistake of judgment and took information they should not have taken.
Many of the employees who have their former employer’s information will — at least once counsel is involved — promptly realize the error of they ways and cooperate with the trade secret owner to ensure that all information is returned and that all copies are permanently removed from their possession. Nevertheless, in many of those cases, the former employer continues to press the misappropriation claim, long after any potential material harm has been addressed.
While we have all represented many such defendants, it was John who came up with the idea of amending the DTSA to fix the problem. Specifically, John proposed the following two amendments:
(1) a “safe harbor” provision for penitent defendants who have agreed to an injunction and are cooperating in a litigation; and
(2) a trade secret identification requirement similar to the Model Local Rule suggested by the Sedona Conference’s Trade Secrets Working Group.
In this episode of Fairly Competing, John, Ben, and I discuss John’s proposed amendments – and our plans to try to make those a reality.
You can join us on Spotify or Apple Podcasts, or go to FairlyCompeting.com, if you’re just looking for the RSS feed.
And, because this show is for you, please email Russell Beck (rbeck@beckreed.com), Ben Fink (BFink@bfvlaw.com), or John Marsh (jmarsh@baileycav.com) with any topics you’d like to hear us discuss. While we cannot offer legal advice on the show, we can certainly discuss any issues you may be wondering about.
*Thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image. See less –
