The DTSA allows a trade secret owner to bring an action “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The DTSA contains a broad definition of “trade secret”: With the DTSA, a civil action under the DTSA can include claims based on other federal or state laws, including claims under the UTSA or other appropriate state laws because the DTSA does not “preempt or displace” other federal or state laws for trade secret misappropriation. Because companies and their employees are often citizens of the same state, the “diversity of citizenship” requirement often served as a barrier to trade secret actions being filed in federal court. Prior to the DTSA, a federal civil action based on a state law claim for misappropriation (absent a federal question) required “diversity of citizenship” between the trade secret owner and the accused misappropriator. Such a patchwork of laws made civil remedies for trade secret misappropriation difficult, especially for companies whose business, employees, or trade secrets cover multiple states. Although 47 states have adopted a version of the Uniform Trade Secrets Act (UTSA), it has not been adopted in a uniform manner. Prior to enactment of the DTSA, trade secret owners had to look to individual state laws for a civil remedy. Although the DTSA covers both civil and criminal misappropriation, this article focuses on its civil aspects. The good news is that companies can typically enter into written agreements with employees and business partners that will help them preserve their trade secrets and position themselves for a strong action under the DTSA. To help address this problem, on May 11, 2016, President Obama signed the Defend Trade Secrets Act (DTSA) into law.Įighty-five to 90% of trade secret misappropriation is due to the actions of employees and business partners.

Defend trade secrets act of 2016