The Defend Trade Secrets Act of 2014

On April 29, 2014, Senators Christopher Coons (D-Del) and Orrin Hatch (R-Utah) introduced a bipartisan bill (S.2267), entitled the Defend Trade Secrets Act of 2014 (“DTSA”).  If enacted, the DTSA will allow companies to protect their trade secrets in federal court.

The DTSA authorizes a trade secret owner to bring a civil cause of action in federal court for either a violation of the Economic Espionage Act; or a “misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The DTSA would provide trade secret owners with federal rights and remedies, including injunctions and treble damages for willful and malicious misappropriation.  It would also allow a trade secret owner to obtain ex parte relief to preserve and seize evidence of trade theft.  The statute of limitations for a claim is 5 years.

Unlike other types of intellectual property (i.e., patents, copyrights and trademarks), there is currently no federal civil cause of action for trade secret misappropriation.   While the Economic Espionage Act addresses trade secret theft, it is a criminal statute and creates no private civil cause of action for injured parties. Currently, trade secrets may only be protected by  one of the state law forms of the Uniform Trade Secrets Act (UTSA), other state statutory law and/or common law.  The DTSA will not preempt state law causes of action.