Trade Secrets are taking on greater importance in many businesses, especially those involved in internet commerce. Consumer data (names, e-mail address, buying habits and other data collected and recorded when we do business) can be a company’s most valuable asset. It opens the door to low cost, direct targeted e-mail and internet advertising. Current laws do not provide comprehensive protection or a means to redress trade secret misappropriation. There is criminal prosecution under the Economic Espionage Act of 1996 but this can’t compensate the losses and damages suffered by the victim business.
The proposed Private Right of Action Against Theft of Trade Secrets Act and the FAIR Act (The Future of American Innovation and Research Act) would allow private civil actions to recoup damages as well as seek injunctive relief, punitive damages, restitution relief and attorney’s fees. Courts may also seize the electronic items that facilitated the trade secret theft (cell phones, computers and mobile devices). The FAIR Act allows action against foreign defendants, enabling companies to prevent and deter trade secret theft resulting from cyber invasion and cyber-attacks.
One notable part of these new laws- they declare that there is no trade secret cause of action in the case of reverse engineering. This is consistent with the current body of trade secret laws. Trade secrets are just that- secrets. If someone can buy one and un-build it to see how it is made, it is not much of a secret. Protection for mechanical devices and apparatus is provided through patent law rather than trade secret law.