Previously, we began looking at the topic of trade secret protection. As we noted, trade secrets can be enforced at both the state and, more recently, at the federal level. Last year, the Defend Trade Secrets Act was signed into law, providing business a federal cause of action to enforce trade secret infringements.
The Defend Trade Secrets Act (DTSA) does not preempt, or take precedence over state law protections, but simply provides an alternative avenue for businesses to enforce trade secrets. This allows companies that operate in multiple states to have uniform protections.
As under California law, the DTSA protects information the business has taken responsible measures to keep secret and which has economic value because it is only known to the company. Trade secrets can be enforced against those who improperly and without consent acquire, disclose or use them.
The DTSA allow businesses take seek an injunction to prevent actual or threatened misappropriation of trade secrets, once misappropriation has been confirmed. In some cases, a federal court may order reasonable royalty payment for the business, and in extraordinary circumstances, it may be possible to obtain civil seizure of trade secrets as a preventative measure for potential misappropriation. Businesses may also be award different types of damages for the business depending on the nature of the violation. Such remedies may also be available under state law.
Trade secrets actions are subject to certain limitations under both California and federal law. At the federal level, trade secret protections may not be enforced against employees who disclose trade secrets in order to report suspected violations of law. California law makes exceptions for disclosures made under the California Public Records Act.
Businesses, of course, can and should work with an experienced attorney not only to prosecute trade secret violations, but also to come up with a plan to best protect their valuable information from potential misappropriation. A skilled advocate will know how to protect a business’ interests and ensure other parties are held to account for violating its rights.