Trade secret cases often follow a similar pattern. A business partnership or relationship with a contractor falls apart, and one party sets off with the other’s trade secret. A lawsuit then follows in which damages are available. The same fact pattern may play out where the defendant is a state entity—for example, a state university hospital system that stole a collaborator’s work in developing a new medical treatment. In such circumstances, a trade secret owner must contend with the doctrine of state sovereign immunity, which imposes significant barriers to relief.
Abrogation of Sovereign Immunity
State sovereign immunity, a doctrine reflected in the 11th Amendment, protects state entities from suit in federal court. Congress, however, may abrogate a state’s immunity pursuant to its authority under the 14th Amendment. In 2016, Congress enacted the Defend Trade Secrets Act (DTSA), which created a federal cause of action for trade secret misappropriation. After the DTSA’s enactment, some litigants have argued that it abrogated state sovereign immunity for trade secret misappropriation.