The DTSA at One: An Empirical Study of the First Year of Litigation Under the Defend Trade Secrets Act

Abstract

This article represents the first comprehensive empirical study of the Defend Trade Secrets Act (“DTSA”), the law enacted by Congress in 2016 that created a federal civil cause of action for trade secret misappropriation. The DTSA represents the most significant expansion of federal involvement in intellectual property law in at least 30 years. In this study, we examine publicly-available docket information and pleadings to assess how private litigants have been utilizing the DTSA. Based upon an original dataset of nearly 500 newly-filed DTSA cases in federal court, we analyze whether the law is beginning to meet its sponsors’ stated goals of creating more robust and efficient litigation vehicles for trade secret misappropriation victims, thereby helping protect valuable American intellectual property assets. We find that, similar to state trade secrets law, the paradigm misappropriation scenario under the DTSA involves a former employee who absconds with alleged trade secrets to a competitor. Other results, however, raise questions about the new law’s ability to effectively address modern cyberespionage threats, particularly from foreign actors, as well as the purpose (or lack thereof) of trade secret law more broadly. We conclude by discussing our data’s implications for trade secret law and litigation, as well as commenting on the DTSA’s potential impact on the broader issues of cybersecurity and information flow within our innovation ecosystem