The DTSA, enacted as amendments to the Economic Espionage Act of 1996 (28 U.S.C. §§ 1831-1839), became effective on May 11, 2016. For the first time, it gave trade secret holders the option to file civil claims in federal courts, without having to include a related federal claim or proving that the parties are citizens of different states. Jim provided expert advice and drafting help to the Senate Judiciary Committee, and testified in favor of the legislation (see below). Senator Orrin Hatch, one of the bill’s sponsors, said that Jim was “instrumental” in securing its passage. Two years later, Jim was invited by the House Judiciary Committee to testify about how the new law was working (see below).
Trade secrets in the U.S. had traditionally been governed by state common law. Efforts to harmonize standards through the Uniform Trade Secrets Act (UTSA) had mixed success. Although the UTSA has been adopted in 49 states (New York is now the only holdout), those statutes are varied, as state legislatures have chosen to modify the suggested language. The net result was that state trade secret law was far from “uniform,” creating inefficiencies for businesses that operated in multiple states.
The wording of the DTSA is almost identical to the UTSA, and it appears that the federal law is having a positive effect in creating a more harmonious interpretation of trade secret rules across the country. More trade secret cases are now brought in federal court, which can provide the advantage of nationwide service of process and more predictable jurisdiction over cases that involve foreign actors or misappropriation that occurs in another country with effects felt in the U.S.
There are some special provisions in the DTSA, allowing ex parte seizure of information or devices in some limited cases, and restricting the power of judges to issue injunctions against some departing employees. In addition, the DTSA established immunity for employee whistleblowers who disclose confidential company data to law enforcement.
The Defend Trade Secrets Act began as a bill in the United States Senate, introduced by Senator Orrin Hatch (R - UT) as Senate Bill 1890 on July 29th, 2015. The bill was referred to the Senate Judiciary Committee and hearings took place on December 2nd, 2015.
James Pooley was invited to testify as an expert in the hearing, titled “Protecting Trade Secrets: the Impact of Trade Secret Theft on American Competitiveness and Potential Solutions to Remedy This Harm”.
After the committee hearings had concluded, the bill passed out of committee and was unanimously approved by the full Senate by a vote of 87-0.
After Senate Bill 1890 passed the United States Senate, it then went through the committee process in the United States House of Representatives. On April 27th, 2016, the bill was brought to a vote of the full House, and was passed by a vote of 410 - 2.
With approvals from both the House and the Senate, the DTSA bill then made its way to the White House, where on May 11th, 2016, President Barack Obama signed the bill into law.
Two years after the passage of the Defend Trade Secrets Act, James Pooley was again called up to testify in front of Congress about the law.
The House Subcommittee on Courts, Intellectual Property, and the Internet called for expert testimony and questioning regarding the DTSA, to find out if the law was working as it was intended.
On April 17th, 2018, Jim testified alongside other experts about “Safeguarding Trade Secrets in the United States”.