Business-Minded Legal Solutions

Looking at state, federal trade secret protection laws, P.2

Previously, we began looking at the importance of trade secret protections, and the various remedies Texas courts may take to enforce these protections. At the federal level, the Defend Trade Secrets Act provides similar protections.

The Defend Trade Secrets Act creates a federal cause of action for business to protect trade secrets from misappropriation. The law targets both the improper acquisition and use of trade secrets, and provides for various remedies, including injunction, civil seizure, royalties, damages including punitive damages where appropriate, and reasonable attorney’s fees. 

Another notable measure under the federal law is whistleblower immunity, which provides safe harbor for employees who disclose trade secrets to an attorney or a government official in order to report a suspected violation of law or in filing a lawsuit made under seal. The provision establishes notice requirements to take advantage of whistleblower immunity, and employers need to be aware of these requirements as they can affect an employer’s ability to seek certain remedies.

The Defend Trade Secrets Act does not preempt state trade secret protections, so business can choose to seek protection under either state or federal law. Some issues remain to be worked out, though, such as what happens when state and federal law conflict on the definition of trade secret or on the requirements for keeping trade secrets confidential.

Businesses can and should work with an experienced attorney in handling issues surrounding trade secrets, both to establish sound policies for protecting valuable information from misappropriation and to effectively handle violations when they arise.