I have been following the progress of bills in the U.S. House and Senate that would create a federal cause of action for theft of trade secrets. I just don’t see a need for this legislation.
What material problem will this legislation solve?
We already have substantial uniformity to trade secret law across the nation. Forty-seven of the fifty states have adopted the Uniform Trade Secrets Act. Yes, there are some variations in the text of the statutes adopted across states, but the practical effect of those variations is relatively minor.
The federal statutes don’t promise uniformity anyway because they expressly state that they will not preempt existing law. Thus, the proposed federal cause of action would merely add another cause of action into the list that plaintiffs assert against defendants. The state law causes of action would still frequently be asserted in federal court complaints, so litigants would still have to address variations in state law to the extent they exist.
Plaintiffs already often have access to federal court through use of existing causes of action and diversity jurisdiction. For example, General Electric Healthcare recently needed to file a lawsuit against a computer engineer who allegedly stole approximately 2.4 million computer files with the intent to use them at a Chinese competitor. GE filed the case in federal court and asserted claims under both the federal Computer Fraud and Abuse Act and the Wisconsin Uniform Trade Secrets Act.
In short, the legislation strikes me as a solution without a problem.
Photograph by permission of Architect of the Capital