The President and Congress have helped add another protective wall to the realm of Intellectual Property Law this week. The Defend Trade Secrets Act of 2016 is a new federal law created to protect American companies and their trade secrets from corporate espionage and theft. Although trade secrets are protected by most individual state laws, they are not protected by federal law. According to the National Law Review, for the first time, the DTSA will create a federal civil cause of action for misappropriation of trade secrets. The law will hold a provision protecting individuals who disclose trade secret information to their attorneys.
Trade secrets are different in nature from its own Intellectual Property counterparts. Unlike patents, trademarks, and copyrights, trade secrets are registered in public databases. Trade secrets are unknown to the general public. Take for example Coca Cola’s secret formula, or Google’s security algorithms. Although they are known to exist, few know what they actually are and how they are made.
Trade secret protections guard the innovations and creativity of American firms in the United States, allowing for a fair and competitive market that the American economic system attempts to foster. They guarantee a competitive advantage over competitors and ensure a system where innovation is valued. With the rise of the global, digital economy, and the advent of the internet, trade secret threats are at an all time high.
According to Michelle K. Lee, former Director of the US Patent and Trademark Office, trade secret thefts cost U.S. innovators more than an estimated $300 billion in revenue annually. Cyber Espionage has misappropriated trade secrets across state and international borders, potentially undermining national security and weakening the U.S. economy. With the Defend Trade Secrets Act, businesses are now better protected with the support of the federal government.
The National Law Review recommends that all companies consider reviewing and revising their policies and contracts governing trade secrets applicable to employees, contractors, vendors, and service providers. This will ensure that all involved parties comply with DTSA standards.
Thanks to a joint effort by Congress and the President, the Defend Trade Secrets Act of 2016 is now law. This is surely a win for American innovation and trade protection in the United States.
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