Archive for the ‘trade secret misappropriation’ Category

Jan
24

TRADE SECRET MISAPPROPRIATION CLAIMS ARISING FROM CONDUCT PREDATING THE DEFEND TRADE SECRETS ACT OF 2016 ARE ALLOWABLE ACCORDING TO THE NINTH CIRCUIT COURT OF APPEALS – A WIN FOR PLAINTIFFS

On Dec. 16, 2020 in Attia, et al.  v. Google, LLC, et al.,  the Ninth Circuit Court of Appeals held that a misappropriation claim under the Defend Trade Secrets Act of 2016, §18 U.S.C. 1836, et seq. (“DTSA”) may be brought for misappropriation that started prior to the DTSA’s enactment as long as the claim also arises from post-enactment misappropriation or from the continued use of the same trade secret.

The DTSA mirrors the Uniform Trade Secrets Act (“UTSA”) and also expands the Economic Espionage Act, which criminalizes misappropriation of certain trade secrets. Many states, including Florida, have based their trade secrets laws on the UTSA.  Until the enactment of the DTSA in 2016, trade secret misappropriation claims were generally brought under state statutes, e.g., Florida’s Uniform Trade Secret Act (“FUTSA”).

The DTSA allows plaintiffs to bring a federal claim for any trade secret misappropriation that occurred on or after May 11, 2016.   In Attiva v. Google, LLC, the Ninth Circuit decided that a claim under the DTSA can still be brought, even if the misappropriation actually started before the enactment of the DTSA, as long as the misappropriation continued through the DTSA’s enactment date (May 11, 2016) and involved the same trade secret.  In reaching its decision, the Ninth Circuit explained that the Uniform Trade Secrets Act (“UTSA”), includes an anti-continued use provision while the DTSA lacks a similar provision.  Noting that Congress was aware of the UTSA at the time the DTSA was enacted, the court concluded that the apparently deliberate omission of an anti-continued use provision indicated that the DTSA was not intended to be limited in this way.  In its reasoning, the Ninth Circuit pointed out that the DTSA language discussing “a continuing misappropriation constitutes a single claim of misappropriation” relates only to a statute of limitations argument and does not intrinsically prohibit DTSA misappropriations claim from being brought on the basis of continued use.

Although the DTSA is a relatively new statute and has not “seen” much litigation, the Attiva decision clearly expands the DTSA’s reach and is expected to be relied on by other federal courts asked to rule along the same lines.   Additionally, the decision represents a significant shift in trade secrets law which may cause more plaintiffs to commence trade secrets misappropriation actions in federal court because:

  • it allows for claims of trade secrets misappropriation to be brought under the DTSA at least in district courts “under” the Ninth Circuit even if the misappropriation began before the 2016 enactment of the DTSA;
  • it expands potential liability for defendants of trade secret claims under the DTSA;
  • it provides plaintiffs with protection where state statutes following the UTSA may not.

 

WE THANK YOU FOR READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  If you have any questions about trade secret misappropriation as either a potential plaintiff or defendant, contact us for a consultation.  Also contact us for a complimentary trade secret checklist to ensure you or your company are taking the appropriate steps to protect your trade secrets.

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Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

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