Civil litigation is expensive, both for the party bringing suit and the party that must defend against such claims. For a variety of reasons, not the least of which are the usual requests for preliminary relief and protective orders, trade secret litigation is particularly expensive. These costs can have a crippling effect on small businesses and start-up companies that are accused of trade secret misappropriation, often resulting in litigation expenses that exceed the alleged harm to the plaintiff. Such litigation is particularly costly and unjust in cases where the plaintiff asserts rights that, due to common misunderstandings about the limited scope of trade secret rights, they do not have.
While no body of law can perfectly distinguish right from wrong, and, thus, there are bound to be civil judgments that are both under- and over-inclusive, due to the possible anticompetitive effects of trade secret claims, the predominate law that currently governs trade secret law in the United States, the Uniform Trade Secret Act, includes numerous provisions that are designed to strike a balance between the putative trade secret owner and the alleged misappropriator, frequently erring on the side of competition, information diffusion, and employee mobility. Unfortunately, the proposed legislation to create a civil cause of action for trade secret misappropriation, the Defend Trade Secrets Act (DTSA), threatens to upset this balance by, among other things, significantly increasing the costs of trade secret litigation.
This Essay details how various provisions of the DTSA are bound to be highly litigated and, as a result, will greatly increase costs for litigants and the federal judiciary, making the DTSA not worth its costs.