By: Lisanne L. Mikula, Esquire
On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (the “Act”). The Act facilitates the process for protecting trade secrets by allowing a trade secret holder to assert a federal claim in the federal court system for claims of wrongful misappropriation or use of trade secrets. The Act also reinforces important rights of an employee to make limited disclosures of trade secrets under certain circumstances and imposes a duty on employers to notify employees of those rights.
The new legislation-overwhelmingly approved by lawmakers on both sides of the aisle-responds to the rapid increase of trade secret theft. With its heavy reliance on technology, the modern workplace exposes trade secrets to access by a far broader range of persons than was possible “back in the old days” when highly confidential information was locked away in the CEO’s filing cabinet.
Until now, a person or company in Pennsylvania seeking to protect a trade secret could file suit only under the Uniform Trade Secrets Act, as that Act is interpreted and applied in Pennsylvania. While most states have adopted the Uniform Trade Secrets Act, states across the nation have adopted different versions of that law. As such, protecting a trade secret was complicated for any holder of a trade secret conducting business in more than one state.
While Pennsylvania law-and Pennsylvania state courts-remain available for claims of misuse or misappropriation of trade secrets, the Defense of Trade Secrets Act not only allows immediate access to the federal court system, but it also fosters the development of a more consistent approach nationwide in terms of how trade secrets are to be protected. This will enable holders of trade secrets to more effectively plan for the protection of their trade secrets.
The Act also provides important protection to employees who must make a confidential disclosure of a trade secret to a governmental authority or in a court filing in order to seek redress for a suspected violation of the law. The Act establishes limited immunity protecting a “whistleblower” from misappropriation claims if the disclosure of the trade secret is (A) made (i) in confidence to a federal, state, or local government official, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document which is filed under seal in a lawsuit or other proceeding.
To foster legitimate whistleblower activity, the Act provides that effective immediately, employers are required to provide a notice of immunity to employees and contractors in any contract or agreement with an employee or independent contractor that governs the use of a trade secret or other confidential information.
The attorneys at the Law Firm of DiOrio & Sereni, LLP are available to help you. Contact Lisanne L. Mikula, Esquire at 610-565-5700, or send her an e-mail at [email protected].
Like what you see? Join our mailing list
Like what you see? Share it, or join our mailing list
