Posts Tagged: "President Barack Obama"

Handle with Care: Civil Seizure Under the Defend Trade Secrets Act

The DTSA’s provision for civil seizures provides victims of trade secret theft with a powerful remedy to prevent further dissemination of the trade secret and limit further harm. However, Congress balanced this powerful tool with severe consequences for those movants who misuse it. When seeking to use this remedy, victims of trade secret theft must be careful to comply with all the detailed requirements or they may be far worse off than before. It is a powerful weapon, but like most powerful weapons, it must be handled with great care lest it cause serious self-inflicted injury.

Innovation only occurs when entrepreneurs are incentivized to take risks

Believing that innovation does not come from risk taking inventors, entrepreneurs, start ups, or even from the likes of Silicon Valley, is naïve in the extreme. Unfortunately, this “you didn’t build that” belief system seems to permeate President Obama’s thinking with respect to innovation, and has trickled down within the Administration. This view is also shared by many in Congress too. Sadly, this fatalistic view removes the virtues of work and ignores the sacrifices it takes to succeed. Worst, such a world-view belittles risk taking, which is an absolute prerequisite to business success, particularly with respect to innovation.

Should Section 101 of the Patent Act be Removed

David Kappos, the director of the USPTO under President Obama from 2009 to 2013, recently called for congress to repeal section 101 of the patent act. According to Kappos, the current chaotic “I know it when I see it” 101 test that must be somehow consistently applied by thousands of USPTO examiners and hundreds of judges, means American inventors are better off seeking protection in China and Europe. While America “is providing less protection than other countries”, European countries are “putting their foot down in favor of innovation”.

Misappropriation of a Trade Secret Under the DTSA

The DTSA amends the definition of misappropriation from what was found in the EEA to bring the definition more in line with that of the Uniform Trade Secrets Act (UTSA) that has been adopted by almost all U.S. states. Indeed, apart of explicitly recognizing certain potential defenses that are discussed in the commentary of the UTSA, the DTSA is identical to the UTSA. According to the House Report, “The Committee intentionally used this established definition to make clear that this Act is not intended to alter the balance of current trade secret law or alter specific court decisions.” House of Representatives, Report No. 114-529, April 26, 2016, at 14. Federal courts therefore, will look to state decisions involving the state’s version of the UTSA for guidance.

Definition of a ‘Trade Secret’ Under the DTSA

In general, the form of the information qualifying as a trade secret under the DTSA is extremely broad, and includes information of any form, regardless of “how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing,” and of any type, “financial, business, scientific, technical, economic, or engineering information,” so long as: (1) the information is actually secret, because it is neither known to, nor readily ascertainable by, another person who can obtain economic value from the disclosure or use of the information; (2) the owner has taken “reasonable measures” to maintain the secrecy; and (3) independent economic value is derived from that secrecy.[i] By comparison the UTSA identifies, by way of example, eight specific types of trade secret information; “formula, pattern compilation, program device, method, technique or process.” The DTSA, unlike the UTSA, also provides that information “stored” only in an individual’s memory can be the subject of a civil claim for theft of trade secrets.