As we have previously noted, Congress this year is actively considering two bills that would create a federal private right of action for trade secret theft: The Trade Secrets Protection Act (H.R. 5233) and the Defend Trade Secrets Act (S. 2267). These bills have been spurred in large part by increased foreign cyber-espionage affecting American companies.
Although the bills have enjoyed bipartisan support in Congress and in the business community, including from the National Association of Manufacturers, last month a group of dozens of law professors in the intellectual property and trade secret fields sounded a note of caution by publishing a Letter in opposition to the two bills. While acknowledging that the United States needs to increase protection against cyber-espionage, the professors argue that the bills should be rejected for several reasons, including:
1) existing state law is sufficiently uniform and effective;
2) if enacted, the bills will create parallel, redundant and damaging law; and
3) the bills as drafted could lead to unintended consequences such as anti-competitive results, increased risk of accidental disclosure of trade secrets, and damage to collaboration among businesses and mobility of labor.
The Professors’ Letter and continued engagement in the future on these issues may well affect the passage and/or shape of the two pending bills. We will continue to monitor and report upon these proposed federal trade secrets bills.