On July 29, a bill was introduced in the US Congress to amend chapter 90 of title 18 of the United States Code to provide Federal jurisdiction for the theft of trade secrets.

The proposed Act is referred to as the ‘‘Defend Trade Secrets Act of 2015.”

Under the Act,

An owner of a trade secret may bring a civil action … if the person is aggrieved by 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 Act also provides for

an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.

Remedies

Remedies under the Act would include:

  • injunctions to prevent actual or threatened trade secret misappropriations
  • damages for actual loss caused by a trade secret misappropriation
  • damages for unjust enrichment, measured by a reasonable royalty for the disclosure or use of a trade secret
  • treble damages for cases where a trade secret is “willfully and maliciously” misappropriated

Actions under the Act would need to be commenced within five year from the date on which the trade secret misappropriation was discovered or “by the exercise of reasonable diligence” should have been discovered.

Takeaway

Trade secret claims are now brought under state law, or sometimes under the federal Computer Fraud and Abuse Act (CFAA). However, courts have recently interpreted the CFAA narrowly, to address outside “hacking” rather than unauthorized access and copying of sensitive materials by employees.

If passed, the Act will provide new remedies for victims of trade secret theft by employees. However, many previous similar bills – including the “Defend Trade Secrets Act of 2014” — have failed to be enacted into law.

About Us

Leech Tishman’s Intellectual Property Group is based in Pasadena, California with a team of highly-regarded legal professionals with prosecution and litigation expertise in the fields of patent, trademark, copyright, and trade secrets.

Please also visit us online for more information about our services.

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