5 April 2016Copyright

US Senate passes federal trade secrets act

The US Senate has approved legislation that will shore up trade secret protection and allow claims of theft to be brought in federal courts.

In a vote yesterday, April 4, the Senate passed the Defend Trade Secrets Act (DTSA) by 87 votes to 0.

The bill was passed by the Senate Judiciary Committee in January this year and will now head to the House of Representatives.

If the bill is approved, IP owners will be able to secure federal relief for the misappropriation of their trade secrets, as opposed to going through individual state courts.

Also, under “extraordinary circumstances”, a judge may order the seizure of another party’s property in order to “prevent the propagation or dissemination of the trade secret that is the subject of the action”.

Peter Brody, partner at law firm Ropes & Gray in Washington, DC, said: “The Senate’s vote has the potential to create the first federal civil remedy for trade secret misappropriation.

“While there is some overlap between the scope of the DTSA and those remedies currently available in many state courts, the bill also offers new, robust forms of relief, including a provision permitting ex parte seizure orders to prevent further dissemination of the trade secret information.

“The DTSA is designed to respond to growing concerns in the digital age about the vulnerability of trade secrets from both traditional sources, such as former employees, and cyber-based threats,” he added.

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