Trade secret law and practice is about to change if Congress pursues the “Defend” Trade Secrets Act with the current provisions. Not only will the practice change, rights as well as competition, may be affected for the worse. The attention that this legislative activity is getting regarding trade secrets is scant to say the most. Those larger entities holding a long list of trade secrets are pushing for its passing. Yet the fact that the bill has issues has not driven the attention it needs in order to address the glitches that will affect industries, innovation, competition, and it practice. To this day few are aware of the consequences of what the bill intends to do with regard to how courts will address trade secret misappropriation or theft.
Because the litigation involved in trade secret cases is murky where claims cross so commonly, the bill will have a chilling impact in the litigation process and could very well lead to a more anti-competitive environment. The bill proposes to provide a procedural ‘fast lane’ allowing trade secret owners to prosecute claimed trade secrets takers through a newly created ‘ex parte’ step. The bolder that crushes the process is the absence of notice that would otherwise inform the individual ‘defendant’ that its assets are going to be seized and that a court proceeding is going to adjudicate its rights to the claimed trade secrets.
This is without precedent in the field and most importantly, due process for defendants is rendered nil due to the fact that the bill proposes to not allow adequate notice of judicial proceedings regarding the claims against them nor provide them adequate opportunity to argue their position in court over the trade secrets in question. More discussion and review is needed before its passing.