On April 4, 2016, the Senate approved the Defend Trade Secrets Act of 2015 (DTSA). As we previously reported, the DTSA amends the Economic Espionage Act of 1996 to create a federal private right of action for trade secret misappropriation. Specifically, the DTSA authorizes a trade secret owner to file a civil action in a United States district court seeking relief for trade secret misappropriation related to a product or service in interstate or foreign commerce. The DTSA also establishes remedies for trade secret misappropriation, including injunctions, civil seizure orders, and damages.
Kelley Drye’s Trade Secrets Practice will continue to monitor Congress’ consideration of the DTSA as it progresses through the approval process, and any other legal developments affecting the protection of trade secrets.
On January 27, 2016, the Senate Judiciary Committee voted in favor of the Defend Trade Secrets Act (“DTSA”), which would amend the Economic Espionage Act of 1996 (“EEA”) to create a federal private right of action for trade secret theft.
Among other things, the bill approved by the Committee provides for injunctions, civil seizure orders, and damages, and amends the EEA’s definition of “trade secret” to align it with the definition contained in the Uniform Trade Secret Act. While the December 2, 2015 Committee hearings exposed some concerns about the bill, several new amendments, including the following, were met with unanimous approval:
- A requirement that seizure orders will issue only in “extraordinary circumstances;”
- A requirement of proof of “actual or threatened misappropriation” in order for an injunction to issue;
- The provision of damages for actual loss, unjust enrichment, and reasonable royalties, as well as exemplary damages in an amount not more than twice the amount of damages awarded;
- An award of attorneys’ fees to the prevailing party when a claim of misappropriation is brought in bad faith, a motion to terminate an injunction is made in bad faith, or the trade secret is willfully and maliciously prosecuted;
- The protection of whistleblowers who disclose trade secrets to the government or in the context of retaliation lawsuits; and
- A statute of limitations of three years after the date the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
It is not known when the DTSA will be presented to the Senate for a floor vote. Kelley Drye’s Trade Secrets Practice, however, will continue to monitor Congress’ consideration of the bill, and any other legal developments affecting the protection of trade secrets.
For more information, please contact:
David I. Zalman
Genna S. Steinberg