Definition of trade secret under indiana law
One year has passed since the Defend Trade Secrets Act DTSA was enacted, providing a new federal cause of action for trade secret misappropriation and new remedies to trade secret owners. In that time, what have we learned? Here are four developments. Courts are reluctant to issue "ex parte seizure" orders. To date, no court has ordered a seizure of property under the DTSA. The DTSA's ex parte seizure provision allows a plaintiff to obtain a court order to seize property when "necessary to prevent the propagation or definition of trade secret under indiana law of the trade secret.
The few courts that have considered the issue agree that the remedy is available only under exceptional circumstances. Sultanovthe Northern District of California considered an employer's ex parte application to seize physical copies of data stored on a pair of former employees' email accounts, a company-issued laptop, and a company-issued mobile phone.
The court refused, choosing instead to grant relief under Federal Rules of Civil Procedure 64 and Another case, Magnesita Refractories Co. Mishrareinforces the perception that the DTSA's seizure remedy should be used only where alternative relief would prove ineffective. In a definition of trade secret under indiana law motion, the employee argued that the seizure was improper because it should have been issued under the DTSA, rather than the Federal Rules.
The court disagreed, finding, among other things, that a DTSA seizure order is appropriate only where alternative equitable relief would be inadequate. Under the DTSA, inadequacy exists where the party bound by the order "would evade, avoid, or otherwise not comply" with the order. The key takeaway from Sultanov and Mishra is that trade secret owners face an uphill battle if they wish to secure an ex parte seizure order under the DTSA.
A claim is viable so long as use occurred after May 11, This resolves ambiguity in the statute, which provides that the DTSA applies only to misappropriation occurring "on or after the date of the enactment of this Act. Trizetto Groupthe Southern District of New York allowed defendants to assert a DTSA counterclaim where the alleged misappropriation occurred prior to Maybut the wrongdoing continued after that date. According to the court, the "plain language" of the DTSA defines misappropriation as "disclosure or use of a trade secret without the consent of another," and so any post-enactment use is sufficient definition of trade secret under indiana law support a DTSA claim.
Citing Syntelthe Eastern District of Pennsylvania recently reached the same conclusion. Other courts will likely follow suit. The DTSA coexists with state law claims. As intended, the DTSA does not preempt state law trade secret misappropriation claims. Multiple federal courts have endorsed this reading of the statute, clearing away any perceived ambiguity. Courts look to state law for guidance.
For example, in Henry Schein v. Cookthe Northern District of California equated the definitions of "trade secret" under the DTSA and the California Uniform Trade Secret Act, finding that the plaintiff established a likelihood of success under each theory without distinguishing the two statutes. Accordingly, where a court is tasked with a de novo interpretation of the DTSA, the court will likely look to cases examining state law claims for guidance. Interestingly, because most states have enacted modified versions of the Uniform Trade Secrets Act, federal district courts sitting in different states may adopt conflicting constructions of the DTSA.
While some questions have been answered, the DTSA remains largely unexplored only one year after its enactment. As new developments arise, look for additional updates from DLA Definition of trade secret under indiana law Intellectual Property and Technology group, and find out more about the act by contacting any of the authors. Related topics Protecting your IP The courts decide.