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  • Scott Sisun and Cameron Meindl

Trade Secrets Update

Unlike other forms of IP such as patents or trademarks, trade secrets have been protected solely under state laws. As a bit of background: A trade secret is information, including formulas, programs, methods, or processes, that is not generally known to the public and can provide an economic advantage over competitors or consumers.

Of the fifty states, forty-eight have adopted the Uniform Trade Secrets Act (UTSA) as their version of trade secret law. However, this past July saw the Defend Trade Secrets Act (DTSA) passed into law, serving as the federalization of trade secret protection, while also preserving previously established trade secret state laws. With the passing of this legislation, civil action on trade secrets can now be brought into federal courts without jurisdiction complications. This represents a substantial advancement in the protection of intellectual property rights in the US.

Among the various important features of the DTSA are its uniform definitions for trade secrets and misappropriation, certain protections for whistleblowers, and, most controversially, ex parte seizures for plaintiffs. This allows the plaintiff to have the government seize misappropriated trade secrets without providing prior notice to the defendant. To combat abuse of this seizure provision, the Act requires substantial evidence before allowing any seizures to occur. In one of the first decisions interpreting this provision, the U.S. District Court for the Northern District of California refused to issue a seizure order earlier this month in the OOO Brunswick Rail Mgt., et al. v. Sultanov, et al. case. 2017 U.S. Dist. LEXIS 8374 (N.D. Cal. Jan. 20, 2017).

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