The Defend Trade Secrets Act of 2016 creates a federal civil cause of action for trade secret misappropriation. It does not preempt existing state trade secret laws. The Act defines trade secret misappropriation and improper means of acquiring a trade secret. It establishes a three-year statute of limitations and allows for remedies such as civil seizure, injunction, damages, and attorney fees in cases of willful and malicious misappropriation.

1. Defend Trade Secrets Act
of 2016

2. DTSA of 2016
• Amends federal law to create a cause of
action for trade secret misappropriation.
• Does not preempt state laws in this field.
• Creates a three-year statute of limitations for
bringing federal trade secret misappropriation
claims.

3. “misappropriation” Defined
Acquisition of a trade secret of another who
knows or has reason to know that the trade
secret was acquired by improper means or
disclosure of a trade secret of another without
express or implied consent by a person who:
(i) at the time of disclosure or use, knew or
had reason to know that the knowledge of the
trade secret was:

4. (a)derived from or through a person who owed a
duty to maintain the secrecy of the trade
secret or limit the use of the trade secret; or
(b)acquired under circumstances giving rise to a
duty to maintain the secrecy of the trade
secret or limit the use of the trade secret; or
(c) derived from or through a person who owed a
duty to the person seeking relief to maintain
the secret of the trade secret or limit the use
of the trade secret; or

5. (ii) before a material change of the position of
the person, knew or had reason to know that (i)
the trade secret was a trade secret; and (ii)
knowledge of the trade secret had been
acquired by accident or mistake.

6. “improper means” Defined
(A) includes theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to
maintain secrecy, or espionage through
electronic or other means; and
(B) does not include reverse engineering,
independent derivation or any other lawful
means of the acquisition.

7. Remedies
• Civil seizure
• Injunction to prevent any actual or threatened
misappropriation
• Damages for actual loss, damages or any
unjust enrichment, or reasonable royalty
• Damages are doubled if the trade secret is
willfully and maliciously misappropriated

8. Attorney Fees
• Available to the prevailing party if the trade
secret was willfully and maliciously
misappropriated
• Available if the claim of misappropriate is
made in bad faith, which may be established
by circumstantial evidence
• Available if the motion to terminate an
inunction is made or opposed in bad faith.