On Wednesday, President Obama signed the federal Defend Trade Secrets Act of 2016 (the “Act”) that passed both houses of Congress in late April. The statute is the first federal statutory protection afforded to trade secrets and could have a significant impact on trade secrets litigation nationwide. The passage of the law comes as no surprise, and much has already been written about what it means for the future of these disputes. But what about those who are currently involved in trade secrets litigation —could the Act change the course of those cases? There is not a definitive answer, but it is something that all litigants should consider now that the Act has become law.
The first question is whether the Act applies at all in such instances. The Act applies to “any misappropriation of a trade secret (as defined in section 1839 of title 18, United States Code, as amended by this section) for which any act occurs on or after the date of the enactment of this Act.” S. 1890, 1144th Cong. § 2(e) (emphasis added). “Misappropriation” is defined as “(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (B) disclosure or use of a trade secret of another without express or implied consent. 18 U.S.C. § 1839(5). So, in litigation where the “use” of trade secrets is ongoing, there may be an argument that the Act applies.