1. The DTSA now provides a federal civil right of action for trade secret misappropriation.
2. The definition of a trade secret is broader than the Uniform Trade Secrets Act (“UTSA”), which Nebraska has adopted.
UTSA defines a trade secret as– (4) Trade secret shall mean information, including, but not limited to, a drawing, formula, pattern, compilation, program, device, method, technique, code, or process that:
(a) Derives independent economic value, actual or potential, from not being known to, and not being ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
DTSA defines a trade secret as- “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the another person who can obtain economic value from the disclosure or use of the information.”
3. Preemption issues– DTSA Section 2(f) states that DTSA does not preempt any law. Specifically, it states- “Nothing in the amendments made by this section shall be construed to modify the rule of construction under section 1838 of title 18, United States Code, or to preempt any other provision of law.”
4. I took the following chart from an article by Jones Day. Notice that (1) treble damages are allowed for willful and malicious misappropriation, whereas the UTSA allows for double damages in such situation, and (2) DTSA allows for ex parte seizure.
| Definitions | DTSA | UTSA |
|---|---|---|
| “Trade secret” not known by “other persons who can obtain economic value from its disclosure” | “Trade secret” not known by “the public” | |
| “Improper means” expressly excludes “reverse engineering” and “independent derivation” | No express exclusions but comment states proper means include e.g. reverse engineering and independent derivation | |
| Ex Parte Seizure | Available to prevent propagation or dissemination of trade secret, provided TRO insufficient and other requirements met | Not addressed: permits courts to compel “affirmative acts,” such as a return of items misappropriated |
| Injunctions | Employment protection | None |
| No contemplation as to end of injunction | Ends once trade secret ceases to exist and after a reasonable time to eliminate commercial advantage of misappropriation | |
| Ongoing Royalty | “Exceptional circumstances that render an injunction inequitable” | “Exceptional circumstances” such as “an overriding public interest” and where one obtained a trade secret in good faith and would be prejudiced |
| Monetary Damages | Damages for actual loss plus unjust enrichment not addressed in damages for actual loss, or reasonable royalty | Same as DTSA, but additionally precludes damages where “a material and prejudicial change of position . . . renders a monetary recovery inequitable” |
| Up to treble damages for willful and malicious misappropriation | Up to double damages for willful and malicious misappropriation | |
| Attorneys’ fees | Bad faith claims, motion made or “opposed in bad faith,” or willful and malicious misappropriation | Bad faith claims, motion made or “resisted in bad faith,” or willful and malicious misappropriation |
| Statute of Limitations | Five years | Three years |