Congress Creates New Federal Claim to Protect Trade Secrets

Posted on June 17, 2016 · Posted in News

On May 11, 2016, the Defend Trade Secrets Act went into effect, which for the first time creates a Federal cause of action to protect trade secrets.   The statute includes potent new remedies for businesses facing a potential loss of trade secrets.  These include the ability to obtain an order for ex parte, pre-judgment seizure of “property necessary to prevent the propagation or dissemination of the trade secret.”  Double damages are available to companies, as well as attorneys’ fees and costs.  Take special note, however, that the Act requires new and updated confidentiality agreements to notify employees of the Act’s whistleblower immunity for disclosing trade secrets to report legal violations to government officials.  Failure to include such notice bars an employer from recovering attorneys’ fees or costs in protecting trade secrets.