On April 27, 2016, by a vote of 410-2, the United States House of Representatives passed S. 1890, the Defend Trade Secrets Act of 2016 (DTSA).
In a general sense, a trade secret is information which is not generally known or reasonably ascertainable by others, and by which a business can obtain independent economic advantage due to its secrecy. It is noted that typically to receive trade secret protection one must make reasonable efforts to maintain its secrecy. Such steps may include restricting physical access to the subject matter or having those with access to the subject matter sign a non-disclosure agreement. Types of information typically subject to trade secret protection include formulas, recipes, practices, processes, designs, instruments, and patterns.
Currently, trade secrets are the only major type of intellectual property that are not backed by U.S. federal civil remedies to compensate owners for theft. With the House’s action, this seems likely to change.
This bill, penned by Senators Chris Coons (D-DE) and Orrin Hatch (R-UT), and cosponsored by almost two-thirds of the Senate, will now move on to the White House where it will likely have little problem advancing as the Obama Administration has voiced strong support for the bill. President Obama is expected to sign the bill within the next several days.
This legislation will amend the Espionage Act of 1996 to create a federal civil remedy for stealing trade secrets. This will give innovators another path in which to protect their intellectual property and provide them uniformity when protecting their trade secrets.
Michelle Lee, Under Secretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office, commented that “For many companies and industries, trade secrets are a critical element of their overall business strategy, valuable only when that ‘secret sauce’ doesn’t get into the wrong hands. Innovators, manufacturers, and entrepreneurs of all types will benefit greatly from a civil cause of action at the federal courts– providing a more uniform way to take action and stronger resources to prevent the transit of trade secrets out of the country. We applaud today’s bipartisan action, as it builds on the Administration’s unwavering commitment to arm businesses with a robust suite of intellectual property tools, vital to remaining competitive in a global and digital economy.”
