Both houses of Congress passed the Defend Trade Secrets Act (DTSA) in April with overwhelming bipartisan support. (The act now goes to the president for his likely signature.) The new law creates a federal civil cause of action for trade secret misappropriation. It will provide jurisdiction for trade secret claims in federal court and provide some new tools for protecting valuable confidential business information, including ex-parte seizures and whistleblower protection not provided for under state trade secret statutes.
Trade secrets are a form of intellectual property that, unlike trademarks, copyrights and patents, are not registered with the federal government. Trade secrets can include a wide range of confidential business information such as business and marketing plans, financial and customer information as well as technical, scientific and engineering data, research and designs. As the economy has shifted into the “information age,” confidential business information has become increasingly valuable. These assets are under threat from foreign and domestic economic espionage through hacking and other means. Trade secrets are also often threatened through the acts of insiders, including former employees or third-party contractors, who might seek to use the information received in confidence for personal gain. A report by the Commission on Theft of American Intellectual Property estimated that trade secret theft accounts for the loss of $300 billion annually to U.S. businesses. The report also claims that trade secret theft has led to the loss of 2.1 million American jobs.
