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Looking at state, federal trade secret protection law, P.2

Last time, we looked very briefly at some aspects of Wisconsin’s trade secret law. As we noted, trade secret protection is available not only at the state level, but also through the federal courts. Last year, Congress passed the Defend Trade Secrets Act, which created a federal cause of action for the protection of trade secrets. Prior to that, the only way to pursue trade secret protection in federal court was to qualify under special jurisdictional rules.

Under the Federal Trade Secrets Act, there are many similarities to state trade secret protection laws, but there are some differences and new features as well. One of these is that the federal law does not make use of the inevitable disclosure doctrine, under which an employer is able to prevent a former employee from working in a job in which he or she could make use of trade secrets without any evidence of threatened misappropriation. This means it may be harder under federal law for employers to forestall the spread of stolen trade secrets. 

Another important difference between state law and federal law is that the latter allows for ex parte seizure of property to prevent the passing on of stolen trade secrets. This could potentially be an important remedy in cases where a party accused of misappropriating trade secrets is planning to immediately disclose a trade secret or to leave the country. Fortunately, as well, the federal law applies to activity outside the United States, unlike state laws.

The federal Defend Trade Secrets Act also established immunity for those reporting a violation of trade secret law, and requires businesses to gives their employees notice of whistleblower immunity in order to seek certain remedies under the statute.

For businesses, violations of trade secrets can be a significant loss, and proactively working to protect trade secrets is essential to thriving in a competitive industry. Working with an experienced attorney can help ensure a business is well advised not only in how to go about protecting trade secrets, but also in enforcing trade secrets in court.

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