President Obama recently signed the Defend Trade Secrets Act of 2016 (“DTSA”), which provides California businesses with another tool to protect their trade secrets. Specifically, the DTSA provides trade secret owners with a federal civil right of action to pursue businesses and individuals which have misappropriated their trade secrets. The DTSA states in part that “[a]n owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” DTSA, 114 S. 1890.
Today we live in an interconnected world where employees and competitors can use small devices to copy and steal thousands of pages of critical trade secrets. Take for example the case of former Ford employee, Xiang Dong Yu, aka Mike Yu, of Beijing, China who attempted to steal and transfer sensitive Ford design documents onto a hard drive. He was caught and sentenced by the FBI to 70 months in prison. The DTSA will provide a new tool which California businesses may use to recover their damages for such misconduct.
The DTSA allows for provisional remedies such as civil seizures to prevent the “propagation or dissemination of the trade secret” in extraordinary circumstances, and the appointment of a special master to “locate and isolate all misappropriated trade secret information and to facilitate the return of unrelated property and data to the person from whom the property was seized.” DTSA, 114 S. 1890. Under the DTSA, the judge may also award actual damages, damages for unjust enrichment caused by the misappropriation not addressed in the actual damages, exemplary damages 2 times the amount of actual and unjust enrichment damages awarded, and reasonable attorney fees in cases of bad faith. Id.
Shulman Bastian Friedman & Bui LLP has handled many trade secret cases. It welcomes this additional tool for use in appropriate cases to assist its clients and California business in protecting their intellectual property.