The Defend Trade Secrets Act:

Scope, Issues and Best Practices

9 June 2016 Webinar

2 squirepattonboggs.com

Panelists

Steve M. Auvil is a partner and leader of our

IP & Technology Litigation Practice in the U.S.

David S. Elkins is a partner and leads our

global IP & Technology Practice Group

Jill S. Kirila is a partner in our

Labor & Employment Practice Group

3 squirepattonboggs.com

Agenda

1. Key DTSA provisions, open questions, and

underlying policy considerations

2. Practical considerations in bringing trade secrets claims State v. federal venue

Provisional relief

Pleading and discovery considerations

3. Practical considerations in defending DTSA claims Opposing provisional relief

Internal investigation

Identifying the purported trade secrets

4. Immunity and notice provisions

5. Best practices in avoiding DTSA claims Safeguarding trade secrets – yours and others’

Employee intake and exit processes

6. Q & A

4 squirepattonboggs.com

Ask questions or make comments as we go!

squirepattonboggs.com

Key DTSA provisions, open questions, and

underlying policy considerations

6 squirepattonboggs.com

Key DTSA provisions:

federal subject matter jurisdiction

7 squirepattonboggs.com

Key DTSA provisions:

ex parte seizure orders

8 squirepattonboggs.com

Key DTSA provisions:

ex parte seizure orders - requirements

a TRO “would be inadequate … because [target] would evade, avoid,

or otherwise not comply with such an order”

target “would destroy, move, hide, or otherwise make such matter

inaccessible” if the applicant were to provide that person notice

9 squirepattonboggs.com

Key DTSA provisions:

remedies

Sec. 2(b)(3)

Injunction

Damages

Actual damages and

unjust enrichment

or reasonable royalty

Exemplary damages (up to 2x)

Reasonable attorney’s fees

squirepattonboggs.com

Practical considerations in bringing a

trade secret claim given the DTSA’s advent

11 squirepattonboggs.com

Practical considerations in bringing a trade

secret claim

state court v. federal court

12 squirepattonboggs.com

Practical considerations in bringing a trade

secret claim

state court v. federal court

Provisional relief – availability, type, timing, enforcement

Pleading considerations

Substantive considerations

Disclosure considerations

Discovery considerations

Law enforcement considerations

squirepattonboggs.com

Practical considerations in defending

against DTSA claims

14 squirepattonboggs.com

Practical considerations in defending against

DTSA claims

Ex parte seizure

TRO / motion for preliminary injunction

Internal investigation – litigation hold, forensic analysis

Identifying the purported trade secrets – pleading challenge or

discovery bar?

Criminal liability considerations

squirepattonboggs.com

Immunity and notice provisions

16 squirepattonboggs.com

DTSA immunity

17 squirepattonboggs.com

DTSA exemption for use of trade secrets in

anti-retaliation lawsuit

18 squirepattonboggs.com

Notice requirement regarding immunity

19 squirepattonboggs.com

Notice requirement regarding immunity, cont.

Model Provision

Immunity From Liability for Confidential Disclosure of a Trade Secret to

the Government or in a Sealed Court Filing. The federal Defend Trade

Secrets Act of 2016 immunizes you against criminal and civil liability under

federal or state trade secret laws – under certain circumstances – if you

disclose a trade secret for the purpose of reporting a suspected violation of law.

Immunity is available if you disclose a trade secret in either of these two

circumstances:

(1) You disclose the trade secret (a) in confidence, (b) directly or indirectly to a

government official (federal, state or local) or to a lawyer, and (c) solely for

the purpose of reporting or investigating a suspected violation of law; or

(2) In a legal proceeding, you disclose the trade secret in the complaint or

other documents filed in the case, so long as the document is filed “under

seal” (meaning that it is not accessible to the public).

20 squirepattonboggs.com

Notice requirement FAQs

Consequence of not providing notice?

Loss of exemplary damages and attorney’s fees

Who must comply?

Employees and Contractors

Where must notice appear?

Proprietary information and assignment agreements (PIAAs)

NDAs

Also review stock option plans, severance plans, form employment

agreements

When is the notice requirement effective?

New or amended agreements after May 11, 2016

squirepattonboggs.com

Best practices for avoiding DTSA claims

i.e., avoiding the need to bring them and

avoiding the need to defend against them

22 squirepattonboggs.com

Best practices

1. Safeguarding trade secrets – yours and others’

2. Employee intake and exit processes

23 squirepattonboggs.com

Safeguarding trade secrets –

yours and other’s

Practical tips

Yours

No external hard drives on company computers absent authorization

Restrict access to “highly confidential” information servers

IT alerts for downloads of quantities of files or quantities of data

Email / data transmission limits

Other’s

Legal dept. review requirement for all NDAs – use own form

Strict documentation protocols

If other’s technology of no interest, say it

24 squirepattonboggs.com

Safeguarding trade secrets –

yours and other’s

Focus on inadvertent means of disclosure

Websites!

Trade shows and professional gatherings

Articles and other publications

Job interviews

Customers (consider nondisclosure agreement)

Vendors (ditto)

Consultants (nondisclosure and assignment of proprietary rights)

Studies or surveys

25 squirepattonboggs.com

New employee intake and

existing employee exit processes

New employee intake process

Confidentiality agreement / NDA

Inventions assignment agreement

• State law notices

Noncompete / nonsolicitation

• State law differences

Existing employee exit process

Written reaffirmation of NDA / PIAA

Written confirmation of return of all

company property and data

Prophylactic letter to new employer regarding ex-employee

obligations

squirepattonboggs.com

Questions?