October 20, 2017

Updating the Defend Trade Secrets Act?

Despite statements to the contrary by sponsors and supporters in April 2014, August 2015, and October 2015, backers of the Defend Trade Secrets Act (DTSA) now aver that “cyber espionage is not the primary focus” of the legislation. At last month’s Senate Judiciary Committee hearing, the DTSA was instead supported by two different primary reasons: the rise of trade secret theft by rogue employees¬†and the need for uniformity in trade secret law.

While a change in a policy argument is not inherently bad, the alteration of the core justification for a bill should be considered when assessing it. Perhaps the new position of DTSA proponents acknowledges the arguments by over 40 academics, including me, that the DTSA will not reduce cyberespionage. However, we also disputed these new rationales in that letter: the rogue employee is more than adequately addressed by existing trade secret law, and there will be less uniformity in trade secrecy under the DTSA because of the lack of federal jurisprudence.

The downsides — including weakened industry cybersecurity, abusive litigation against small entities, and resurrection of the anti-employee inevitable disclosure doctrine — remain. As such, I continue to oppose the DTSA as a giant trade secrecy policy experiment with little data to back up its benefits and much evidence of its costs.