Readers may have heard about the recent passage of the Defend Trade Secrets Act, the new federal law which establishes a federal cause of action for trade secret violations. Previously, businesses which had been harmed by a trade secret violation were only able to pursue such claims in state court except in very limited circumstances.
The new law is certainly a good thing for business as it provides an additional avenue to enforce trade secret violations, but as a recent article points out, the law will also force businesses to think more carefully about where to pursue trade secret enforcement. Both legal and procedural issues will need to be considered.
For one thing, business will need to consider whether they will be able to obtain a more favorable jury in federal court or state court. Various factors go into this consideration. To take one example, while unanimity among jurors is required in federal court, state courts vary on this point. The specific circumstances of the case can impact whether a unanimity requirement is in a business' favor or not. Other considerations include differences between state and federal court when it comes to limitations in the discovery process. The availability of and requirements for certain types of remedies can also differ between state and federal court.
From a the perspective of the law itself, given the condition of the law at the federal and state levels, state court is likely to result in more predictable outcomes for the time being, and businesses need to consider whether such outcomes would be more or less in their favor. In our next post, we'll continue this discussion and look at the importance of working with an experienced attorney when determining how to enforce trade secrets.