New Trade Secret Protections For Business

The Defend Trade Secrets Act of 2016 provides new remedies for violations of trade secret agreements.

By Benjamin P. Michaelson

If you haven’t yet heard, President Obama signed the Defend Trade Secrets Act of 2016 (the “DTSA”) on May 11, 2016. What does that mean, you ask? Even if you didn’t ask, I’m going to tell you, well, at least in part, well, at least if you continue reading.

Practically speaking, it means your company’s standard employee intellectual property agreements, third party non-disclosure agreements, and other form contracts that relate to the use of trade secrets are likely now out-of-date, if not obsolete. That doesn’t mean they won’t work, they still should, but not to the highest benefit of the business, and not in full compliance with current law.

The DTSA provides new remedies that the business can obtain for violations of agreements protecting trade secrets and also requires such agreements to provide notice of the right for legally required allowed disclosures.

The new remedies are only available to the business if the agreement is updated to comply with the new code provisions. Thus, in order to take advantage of the DTSA’s new remedies (which include two times the financial damages, as well as both the recovery of attorney fees and the collection of exemplary damages in cases of willful and malicious violations), your company’s standard agreements related to trade secrets must be revised and updated.