10-8 TIMING

• Jurisdiction: United States

10-8 Timing

Timing is another issue that has arisen in cases decided since the DTSA's enactment. Some cases have simply acknowledged in footnotes that the language of the statute has changed since the Economic Espionage Act was amended by the DTSA, but the change in the language had no effect on the court's decision.⁴² In deciding whether to bring a federal trade secret claim, it is still important to investigate and determine whether any "continued use" has occurred since the DTSA's enactment on May 11, 2016. If it has, then a viable DTSA claim may exist. Where defendants have argued for dismissal based on claims regarding pre-DTSA conduct, courts have held that continued use of that trade secret can bring the claim within the realm of the DTSA if the continued use extended through May 11, 2016, or later.⁴³ Defendants should be wary of arguing that a claim should be dismissed simply because the information was misappropriated or acquired before the DTSA's effective date.

Although the Act provides that "a continuing misappropriation constitutes a single claim of misappropriation," that rule applies only to a single subsection of the Act—the statute of limitations.⁴⁴ This means that different theories of recovery, the acquisition theory, and the disclosure theory, could give rise to a DTSA claim post-enactment. Under the acquisition theory, a claim only arises if the acquisition (i.e., the misappropriation) took place on or after May 11, 2016.⁴⁵ But the disclosure theory can save a claim that would not survive under the acquisition theory. Accordingly, if the trade secret was misappropriated prior to the DTSA's enactment, a plaintiff can still bring a federal trade secret claim if the misappropriator used or disclosed the trade secret post-DTSA.⁴⁶

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Notes:

^[42] United States v. Nosal, 844 F.3d 1024, 1042 n.15 (9th Cir. 2016); RF Micro Devices, Inc. v. Xiang, No. 1:12CV967, 2016 WL 5462295 (M.D.N.C. July 14, 2016) ("Because the actions at issue in this case took place before the amendment's effective date, this change is merely noted for clarity.").

^[43] Quintiles IMS Inc. v. Veeva Sys., No. 17-cv-00177 (CCC), 2017 WL 4815547 (D.N.J. Oct. 25, 2017); Marimar Textiles, Inc. v. Jude Clothing & Accessories Corp., No. 17-cv-2900, 2017 U.S. Dist. LEXIS 163458, 2017 WL 4391748, at *6 (D.N.J. Oct. 2, 2017); Adams...