Founders Alert: Defend Trade Secrets Act of 2016

We want to alert you of an important recent legal development concerning trade secrets law.

President Obama recently signed the Defend Trade Secrets Act of 2016 (“DTSA”) into law. The DTSA creates a new federal legal mechanism for businesses to protect their trade secrets. It also enhances the tools available to companies in the event of a theft or breach of their trade secrets, allowing them to seek court orders to seize property (such as computers or other data storage devices) containing misappropriated trade secrets.

In addition, the DTSA grants immunity to whistleblowers who disclose trade secrets to government officials or attorneys for the purpose of reporting a suspected violation of law, or in a document filed under seal in connection with a lawsuit. The DTSA requires employers to provide notice of this immunity in any agreement with an employee, consultant or independent contractor that governs the use of a trade secret or other confidential information, and any such agreements entered into or updated on or after May 12, 2016 must comply with this new requirement. Companies that do not include this notice may not recover certain costs and damages in lawsuits brought under the DTSA.

We have updated the document templates on our Founders Workbench Document Driver® to include this required notice. Please make sure you use these updated forms going forward!

For more information on the Defend Secrets Act of 2016, please read Goodwin’s client alert.

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