Houston Intellectual Property Blog

Making Sure the Defend Trade Secrets Act Protect You

On behalf of Keeling Law, LLC posted in 5 on May 31, 2017.

As stated in our last blog, the Defend Trade Secrets Act (DTSA) provides employers with a valuable legal tool in the ongoing battle against trade secret misappropriation. When a once-loyal employee walks out the door with your valuable proprietary information, the DTSA allows you to (1) stop the former employee from using your trade secrets (including by seizure of property), (2) obtain monetary damages (including exemplary damages of up to two times the amount of actual damages), and (3) recover attorney's fees. However, there's a preliminary requirement for an employer to have all these remedies available: The employer needs to provide notice of specific DTSA provisions to its employees.

Some of the remedies provided by the DTSA are only available if the employer has provided notice of certain protections under the law. This is a new requirement and notice of these protections is not likely addressed in your current employment agreements and other documents. These protections include immunity from civil and criminal liability for disclosure of trade secrets to a government official or an attorney when reporting a violation of the law, or when pursuing an anti-retaliation ("whistleblower") lawsuit.

If the employer fails to provide adequate notice of these safeguards, there can be no recovery of exemplary damages or attorney's fees, even though other remedies under the DTSA may still be available. With the costs that can be associated with litigation, recovery of attorneys' fees and (potentially) exemplary damages can defray some of the costs of securing the return and enjoining further use, of your trade secrets.

Employers need to make sure that proper, written notice of the protections listed in the DTSA is given to their employees and contractors. Notice may be required in confidentiality, non-disclosure, and non-compete agreements, as well as employee codes of conduct. Specific changes may be required in employment agreements and/or company policy manuals to ensure that all remedies available under the DTSA are available.

For more information, contact an intellectual property attorney at Keeling Law, LLC.

Tags: Trade Secrets, DTSA, Intellectual Property, Trade Secrets