Seizure Issues To Consider in Federal Trade Secrets Act

Because ex parte seizures by definition are one-sided, cries of alarm arose over the potential for companies abusing the process to effectively shut down or chill legitimate competition. Changes to the final draft of the DTSA built in protections to guard against abuse and clarify that the ex parte procedure process was to be used sparingly and only in extraordinary circumstances.

Like other applicants, entertainment companies that want to obtain a seizure order bear a significant burden and must show that:

• A preliminary injunction, temporary restraining order or other form of equitable relief would be inadequate because the party to which the order would be issued would evade, avoid or otherwise not comply with such an order;
• Immediate and irreparable injury will occur if such a seizure is not ordered;
• The applicant is likely to succeed on the merits;
• The party against whom seizure would be ordered has actual possession of the trade secret and property to be seized;
• The party against whom seizure would be ordered, or parties acting in concert with that party, would destroy, move, hide or otherwise make such matter inaccessible to the court, if the applicant were to proceed with notice to the party; and
• The applicant has not publicized the requested seizure.

An ex parte order applicant also needs to describe with reasonable particularity the matter to be seized and, to the extent reasonable under the circumstances, the location where the matter is to be seized.