New US Trade Secrets law enters into force

Obama signing billPresident Obama has signed a new law which for the first time creates a federal legal system for the protection of trade secrets.

The Defend Trade Secrets Act was passed by both the House of Representatives and the Senate last month and for the first time will allow companies to file federal civil lawsuits for trade secrets theft. Previously, they would have to sue transgressors under state laws or try to persuade federal prosecutors to bring criminal charges against them.

It effectively allows companies to pursue claims for trade secret misappropriation in federal court like other forms of intellectual property, such as patent, trademark or copyright infringement.

"All too often, some of our competitors, instead of competing with us fairly, are trying to steal these trade secrets from American companies," said Obama, adding that this has direct consequences in terms of the loss of American jobs and access to international markets.

The DTSA follows the passage a few weeks ago of the EU Trade Secrets Directive by the European Parliament by 503 to 131 votes.  The EU directive proved a little more controversial than the US law, amid concerns that freedom of expression - and the rights of whistleblowers and journalists - might be undermined.

MEPS eventually approved a revised agreement reached in December that added safeguards for whistleblowers, protecting them from legal charges for trade secrets breaches undertaken in the public interest.

"With one company out of every five a victim of theft of trade secrets every year, harmonisation should allow the creation of a safe and trustworthy environment for European companies, which will see their intangible assets and know-how secured," the Directive's rapporteur Constance le Grip.

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