As I previously reported in this blog, the U.S. Senate is considering a bill that will create a uniform standard for trade secret misappropriation claims across the United States. The bill, called the Defend Trade Secrets Act of 2016, was most recently under review in the Senate Judiciary Committee. The DTSA would add a private right of action for trade secret misappropriation into the existing Economic Espionage Act, with a variety of additional provisions that are explored in my prior post.
The DTSA bill was reported out of the Judiciary Committee in late January 2016. (See S.1890) The Committee proposed several amendments to the bill, which included:
- limiting the potential for injunctions that employers could obtain against former employees, making it harder to prevent accepting new employment;
- reducing the potential for “exemplary” damages from 3x to 2x of the awarded compensatory damages;
- additional limitations on an ex parte seizure mechanism, which many critics say is fraught with risk of abuse;
- a whistle-blower immunity provision that protects whistle-blowers who disclose trade secret information to government officials in the process of reporting misconduct;
- the statute of limitations was reduced to 3, instead of the originally proposed 5 years.
More recently, on March 16, 2016, the Senate sent the DTSA to the full Senate for a floor vote. The vote is scheduled to take place on April 4, 2016.
The House is considering its own version of the DTSA. (See HR.3326) The House’s timetable is lagging behind the Senate’s. The most recent activity in the House was when the bill was referred to the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet in October 2015.
The DTSA is one of the very few pieces of proposed legislation that enjoys bi-partisan support, so we are likely moving closer to a federal private right of action for trade secret misappropriation. This blog will continue to monitor and report on the DTSA’s progress, so stay tuned.