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New Federal Legislation On Trade Secrets
After years of discussion, Congress recently enacted federal legislation establishing a private right of action for misappropriation of trade secrets, vesting the federal courts with original jurisdiction over the litigation of such claims. On April 27, the U.S. House of Representatives overwhelmingly voted to send the Defend Trade Secrets Act of 2016 (DTSA) to President Obama for his signature. This vote followed the Senate's passage of the bill earlier in April by a vote of 87-0. After signaling his support for some time, the President signed the bill into law May 11.
With this legislation, Congress recognized the growing importance of trade secrets to the U.S. economy and has given businesses, such as those in the entertainment industries, confronted with trade secret theft another powerful weapon to secure injunctive relief and damages by granting federal question jurisdiction over trade secret misappropriation claims without the need for diversity or supplemental federal jurisdiction.
While protecting trade secrets has been a matter of state statute, common law and contract for decades, enactment of the DTSA places trade secrets on a par with patents, copyrights and trademarks, which have long been subjects of federal statute and litigation in federal courts. In addition, creating a federal cause of action provides global and national plaintiffs with a more uniform structure for discovery and the opportunity to develop more uniform federal case law in this area.
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