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Seizure Issues To Consider in Federal Trade Secrets Act
Both before and after the passage of the Defend Trade Secrets Act (DTSA) in May 2016, which created a federal civil cause of action for trade secrets misappropriation, much ink was spilled over the controversial “seizure” provision, which allows a plaintiff to initiate an ex parte proceeding to seize any property “necessary to prevent the propagation or dissemination of the trade secret that is subject to the action.”
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.
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