Earlier this year, President Obama signed into law the Defend Trade Secrets Act of 2016 (the “Trade Secrets Act”) in an effort to give companies and individuals tools to protect their trade secrets.
So, what are trade secrets? Trade secrets are primarily regulated at the state level, and the definition of “trade secret” varies from state to state. Generally a trade secret is any type of commercial information that gives its owner an advantage against competitors or others who do not have the information, and of course, the information must be a “secret.”
Putting this definition in real life scenarios, consider the following examples of trade secrets:
Trade secrets are extremely valuable company assets, and if kept confidential, can drive company growth. If trade secrets are misappropriated (i.e. obtained by improper means) or in violation of confidentiality agreements, the Trade Secrets Act gives trade secret owners access to federal courts (instead of state courts) to litigate the case. Additionally, the Trade Secrets Act permits litigants to obtain certain damages and other relief at the federal level, including damages for willful and malicious misappropriation of the trade secrets. The relief includes a seizure order, which is an application to the court to seize property to prevent further disclosure of the trade secrets.
The Trade Secrets Act applies to conduct that occurred within the U.S. as well as to conduct that occurred outside the U.S. if the person who misappropriated the trade secrets is a U.S. entity or a U.S. citizen or if acts related to the misappropriation occurred inside the U.S.
In conclusion, the Trade Secret Act adds a layer of protection to companies so they can obtain proper relief when their trade secrets are misappropriated. Its international component and applicability to some acts that take place abroad afford U.S. companies additional protection while conducting business internationally. Companies should ensure that the monitor protection of their trade secrets, and should also be aware that the Trade Secrets Act can afford protection for situations where trade secrets are misappropriated.
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