Products Liability Prevention & Defense

New Weapon For Manufacturers: Defend Trade Secrets Act of 2016

top secret documentOn May 11, 2016, President Barack Obama signed the Defend Trade Secrets Act of 2016 (the “DTSA”), which provides a federal civil cause of action to manufacturers for the misappropriation of trade secrets under the Economic Espionage Act.  While the DTSA substantially mirrors the protections afforded under the Uniform Trade Secrets Act, currently adopted by 48 states, the DTSA gives manufacturers a choice of whether to file in state or federal court.  Importantly, the DTSA provides manufacturers with a new avenue to address a wide range of trade secret issues.

For manufacturing companies with trade secrets “related to a product or service used in, or intended for use in, interstate or foreign commerce,” the DTSA provides, for example:

The primary effect of the DTSA is to federalize trade secret misappropriation actions and ensure full access to the federal courts for trade secret litigants, thereby ushering in a new era by providing a federal cause of action for trade secret misappropriation that falls in line with its federal IP cousins.  Manufacturers should take stock and proactively protect against dissemination of their trade secrets while simultaneously updating their employee handbooks and agreements to ensure availability of exemplary damages and attorneys’ fees should any action be required.  As the saying goes, “an ounce of prevention is worth a pound of cure”.

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