U.S. Senate Passes “Defend Trade Secrets Act” Unanimously

April 8, 2016 - from The New York Times

According to a New York Times article published on April 4, 2016,

“The U.S. Senate on Monday approved legislation to give companies greater legal protections for their commercial secrets and allow them for the first time to sue in federal court if they are stolen.

The Defend Trade Secrets Act passed 87-0, amid strong White House backing.

Supporters hope the unanimous vote will boost the bill’s prospects in the House of Representatives.

‘Some thieves would rather not go through the trouble of developing products themselves; they’d rather just steal the fruits of others’ creativity,’ Senate Majority Leader Mitch McConnell said in urging passage of a bill he argued would ‘help protect American innovation.’

Theft of intellectual property, including trade secrets, costs U.S. businesses more than $300 billion a year, according to a 2013 report by the Commission on the Theft of American Intellectual Property, which was made up of a bipartisan group of high-ranking former U.S. officials.”

From a practice point of view, DisputeSoft anticipates that upon passage of the “Defend Trade Secrets Act” (DTSA), many software trade secret actions, heretofore filed primarily in state courts, will gain federal jurisdiction. While the bill does not preempt state law, it does provide a previously unavailable legal forum for trade secret claims that cross state borders. The DTSA also enables federal legal action to be taken when the theft of trade secrets has been perpetrated by a foreign actor.

The DTSA will next be considered in the House of Representatives, where it already enjoys the support of 127 co-sponsors, both Republicans and Democrats. Given the bill’s wide support in both Congress and the White House, we envision a future where trade secrets, like copyrights, will be litigated in the federal courts.

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