On May 11, President Obama signed the Defend Trade Secrets Act of 2016 (DTSA) into law. The legislation, an amendment to the Economic Espionage Act of 1996, grew out of the Obama administration’s determination to protect U.S. corporations from increasing incidents of economic and industrial espionage by foreign competitors and governments, particularly through cyberinvasion into electronic storehouses of business information. The DTSA promises to be a benefit to all employers faced with the theft of trade secrets by departing employees.
The DTSA creates, for the first time, a federal private cause of action for theft of trade secrets—whether products, services, or electronically stored information—to be used or intended to be used in interstate commerce. Under state law causes of action, employers could prosecute employee theft of trade secrets cases in federal court only if federal diversity jurisdiction was present, or perhaps under the federal Computer Fraud and Abuse Act, which has provided limited relief. With the federal rules on corporate citizenship, employers frequently were limited to state court. Now, employers will be able to bring a claim for theft of trade secrets in federal court under the DTSA as a matter of federal question jurisdiction, thus eliminating the need to satisfy the requirements for diversity jurisdiction.
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