This Essay critiques the creation by the 114th Congress of a federal private right of action under the Defend Trade Secrets Act for the state unfair competition cause of trade secret misappropriation hitherto applied mostly to breaches of express or implied confidential relationships between businesses or with employees. The proposed insertion of the Uniform Trade Secrets Act definition of “misappropriation,” including acquisition by “improper means” exemplified by state commercial mores’ expectation of privacy from aerial reconnaissance, into the Economic Espionage Act framework of theft of a more narrowly defined “trade secret” of a defined “owner,” including such actions abroad by American companies, opens litigation opportunities that are unlikely to fulfill the purposes of the legislation. There is no current need to “harmonize” compliance programs, and the non-preemptive legislation would simply add more issues to be litigated in multiple contexts, including disputes over privacy or confidentiality managed by online terms. The legislation’s limitation of injunctions under a promise of “employee mobility” threatens state practices of contractual restrictions on postemployment competition.
DTSA: A Federal Tort of Unfair Competition in Aerial Reconnaissance, Broken Deals, and Employment
Stephen Y. Chow
January 7, 2016