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What is the DTSA and what does it do?

In a post last month, we offered perspective on U.S. laws that offer businesses protection against the theft of trade secrets. At the national level, most states have enacted the Uniform Trade Secrets Act, something close to it, or already have laws on the books that attempt to serve the same purpose. Those statutes handle issues that crop up state to state.

For intellectual property protection at the international level, there are several measures in play. The North American Free Trade Agreement sets minimum standards on trade secret protection that all signatories are required to follow. At the same time, the Economic Espionage Act (EEA) gives trade secret protection on a global scale priority status.

Then there is the Digital Trade Secrets Act.

DTSA was enacted in 2016 in recognition that the digital age makes the theft and transfer of secrets easier than ever before. All it takes is internet connectivity and the push of a few buttons. Following is a look at some of the more important provisions of the DTSA.

  • Trade secrets defined: The language of the law is broad in character, drawing directly from the EEA. That law states that trade secrets cover all forms and types of information, whether tangible or intangible, no matter how its documented or stored, as long as:
    1. Its owner can show reasonable efforts have been made to keep the information secret
    2. The information can be shown to have actual or potential independent value.

  • Misappropriation defined: The language of this section is more specific stating that it means:
    1. The attainment of a trade secret by a person who knows or has reason to know that it's been obtained improperly
    2. The revelation or use of the trade secret by someone if they used improper means to acquire the information, knew or had reason to know it was obtained improperly

One other significant facet of the DTSA is that it gives owners of trade secrets the right to seek civil remedy in federal court without giving up potential to seek remedy under existing state laws. It effectively makes it easier for U.S. companies to enforce their intellectual property rights.

This is important information for any business seeking to do business in China or elsewhere in the world. And where questions or concerns exist, it's best to consult with an attorney with proven skill and experience.

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