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18 U.S.C. § 1836(d).
18 U.S.C. § 1836(b)(3)(A)(i). 18 U.S.C. § 1836(b)(3)(A)(i)(I)-(II).
18 U.S.C. § 1836(b)(3)(A)(ii). 18 U.S.C. § 1836(b)(3)(A)(iii).
Energy & Intellectual Property
THE DTSA LIMITATIONS PERIOD
Because the theft of trade secrets is often done covertly without the knowledge of the owner, it can sometimes be months or years before the owner is aware that it has a claim. Accordingly, the DTSA’s limitations period is based on the owner’s discovery of the misappropriation:
A civil action under subsection (b) may not be commenced later than 3 years after the date on which the misappropriation with respect to which the action would relate is discovered or by the exercise of reasonable diligence should have been discovered. For purposes of this subsection, a continuing misappropriation constitutes a single claim of misappropriation.3
Of course, a trade secret owner cannot remain deliberately unaware of the theft but must “exercise reasonable diligence” in discovering the misappropriation. Accordingly, as previously discussed, it is important that a trade secret owner monitor access to its information and remain vigilant against theft. Furthermore, if the misappropriation continues over a period of time, it constitutes a continuing misappropriation.
WHAT REMEDIES ARE AVAILABLE FOR MISAPPROPRIATION OF A TRADE SECRET?
The DTSA provides for both injunctive and monetary relief and is necessarily flexible to ensure that the remedy best suits the need. With respect to injunctive relief, the Court may grant an injunction “to prevent any actual or threatened misappropriation . . . on such terms as the court deems reasonable . . . .”4 It is important that any such injunction identify the trade secrets with specificity, rather than identify broad categories of information that may include materials that do not qualify for trade secret protection. See Mallet & Co. v. Lacayo, 16 F.4th 364 (3d Cir. 2021) (preliminary injunction prohibiting use of trade secrets vacated and remanded because it did not identify the trade secrets with specificity). However, the injunction may not:
(I) prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows; or
(II) otherwise conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business;5
In addition, the injunction may require “affirmative actions . . . be taken to protect the trade secret.”6 Furthermore, where an injunction would be inequitable, the Court may condition “future use of the trade secret upon payment of a reasonable royalty for no longer than the period of time for which such use could have been prohibited.”7
In addition to injunctive relief, the DTSA also provides different options for the calculation of damages. The
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FDCC ANNUAL INSIGHTS 2023