Update your NDA to include the new Trade Secrets Act

To qualify as a trade secret, the information must be kept confidential from the public, provide inherent commercial advantage to the owner due to its secrecy and the owner must take reasonable steps to protect the secret.

Any confidential information that qualifies as a trade secret receives protection under common law and most US state law that have adopted the Uniform Trade Secret Act (UTSA).

UTSA http://www.uniformlaws.org/shared/docs/trade%20secrets/utsa_final_85.pdf

Defend Trade Secrets Act 2016 (DTSA)

DTSA will enable applicants to file a civil suit for protection of their trade secrets under federal law besides the UTSA and common law.

DTSA is not going to pre-empt the UTSA. This means that applicants still have the choice of whether to sue under the UTSA or under the new DTSA.

The DTSA will also provide for extra monetary damages and injunctive relief in-cluding the ability to apply for "ex parte" property seizures for wrongful use of trade secrets without notice to the offending party.

Misappropriation ofTrade Secret

19 "(5) the terra 'misappropriation' means-20 "(A) acquisition of a trade secret of an-21 other by a person who knows or has reason to22 (know that the trade secret was acquired by im-23 proper means; or

1 "(B) disclosure or use of a trade secret of 2 another without ex-press or implied consent by3 a person who-4 "(i) used improper means to acquire5 knowledge of the trade secret;6 "(ii) at the time of disclosure or use,7 knew or had reason to know that the8 knowledge of the trade secret was-9 "(I) derived from or through a10 person who had used improper means11 to acquire the trade secret;12 "(II) acquired under cir-13 cumstances giving rise to a duty to14 maintain the secrecy of the trade se-15 era or limit the use of the trade se-16 cret; or

17 (III) derived from or through a18 person who owed a duty to the person19 seeking relief to maintain the secrecy20 of the trade secret or limit the law of21 the trade sceret; or22 "(iii) before a material change of the23 position of the person, knew or had reason24 to know that-

1 "(I) the trade secret was a trade2 secret; and3 "(II) knowledge of the trade se-4 eret had been acquired by accident or5 mistake;

Ex parte order

"Ex parte" is a Latin term that refers to an application by and for the benefit of one party. An ex parte order then basically refers to an order that is granted by the court, without notice to the other party.

If the other party was found to be guilty of misappropriation, one of the biggest changes under the DTSA is the introduction of the right to apply for an ex parte order to seize property in “extraordinary circumstances” in order to “prevent the propagation or dissemina-tion of the trade secret that is the subject of the action.”

There's also a required immunity provision in the DTSA that protects whistleblowing employees from any civil or criminal lawsuit if they were to disclose trade secrets in relation to the reporting of a vi-olation of the law to a government official or attorney.

Differences betweenUTSA and DTSA

Summary of the main practical differences

● The definition of what constitutes a trade secret under the DTSA is likely to be broader than under the UTSA.● Under the DTSA, you can file a claim in the federal court instead of relying only on state law or common law.● The DTSA allows you to apply for an ex parte seizure order if you fulfil certain requirements and this can be highly effective in stopping any damag- ing publications or misuse.● The DTSA awards up to three times the damages suffered compared to the UTSA that only awards up to two times the damages suffered.● The DTSA expressly protects whistleblowing employees including con tractors and consultants if a disclosure was made to a government official or attorney for the purpose of reporting a legal violation.● The statute of limitation for an application for UTSA is three years while it is five years under the DTSA.

8 "(b) IMMUNITY FROM LIABILITY FOR CONFIDENTIAL9 DISCLOSURE OF A TRADE SECRET TO T. GOVERN-MENT10 OR IN A COURT FILING.-11 "(1) IMMUNITY.—As individual shall not be12 held criminally or civilly liable muter any Federal or13 State trade secret law for the disclosure of a trade14 secret that-15 "(A) is made-16 "(i) in confidence to a Federal, State,17 or local government official, either directly18 or indirectly, or to an attorney; and19 "(ii) solely for the purpose of report-20 ing or investigating a suspected violation of21 law; or22 "(B) is made in a complaint or other doeu-23 ment filed in a lawsuit or other proceeding, if24 such filing is made under seal.

1 "(2) USE OF TRADE SECRET INFORMA-TION IN2 ANTI-RETALIATION LAWSUIT- An individual who3 files a lawsuit for retaliation by an employer for re-4 porting a suspected violation of law may dis-close the5 trade secret to the attorney of the individual and use6 the trade secret information in the court pro-ceeding,7 if the individual-8 "(A) files any document containing the9 trade secret under seal; and10 "(B) does not disclose the trade secret, ex-11 cept pursuant to court order.

Example of an actual provision that you could use in your non-disclosure agree-ments from Latham & Watkins LLP (https://www.lw.com/)

An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of repotting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, If such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.

https://everynda.com/blog/update-nda-dtsa-trade-secrets-act/