The Where, When And What Of DTSA Appeals: Part 1 - Law360
https://www.law360.com/articles/1055520 1/4
Gregory Lantier
Thomas Sprankling
Expert Analysis
The Where, When And What Of DTSA Appeals:
Part 1
By Gregory Lantier and Thomas Sprankling June 22, 2018, 4:55 PM EDT
Federal trade secret litigation can be as costly and complex as patent litigation. Unlike
patent litigation, however, there has been virtually no appellate guidance on the meaning
and scope of the Defend Trade Secrets Act in the two years since it was enacted. To date,
just four U.S. Courts of Appeals panels have even briefly addressed the law.[1]
This absence of appellate case law is perhaps unsurprising, given how recently the DTSA
was enacted. But given the millions of dollars — and ownership of prized innovations —
at stake in trade secret proceedings, practitioners would be well-advised to be thinking to
the future about where in the country such appeals will occur, when appellate decisions
will be issued, and what issues appellate courts will focus on. This pair of articles will
consider those questions. The first part discusses the limited appellate case law, as well as
where and when the appellate decisions may be issued. The second part will dive into the
“what” question, looking to the history of how other federal intellectual property statutes
have been interpreted for guidance.
Existing Law
The DTSA’s scope and the meaning have long been a subject of interest for the bar and
academia, but the law has received relatively little analysis from the bench.[2] Indeed,
there have only been two appellate decisions that have squarely interpreted the statute’s
language. Both were interlocutory appeals that challenged preliminary injunctions.
In First Western Capital Management, Co. v. Malamed, First Western brought suit under
both the DTSA and the Colorado trade secrets law against a former employee accused of stealing customer lists.
[3] The Tenth Circuit reversed the district court’s grant of a preliminary injunction to First Western, holding that
a violation of the DTSA does not create a presumption of irreparable harm.
Similarly, in Fres-co Systems USA Inc. v. Hawkins, Fres-co brought suit under both the DTSA and
Pennsylvania law against an employee accused of stealing confidential information (such as customer lists and
long-term strategies).[4] The Third Circuit, in an unpublished decision, remanded the preliminary injunction to
the district court for further analysis. In doing so, it explained that showing irreparable harm for purposes of a
Reprinted with permission from Law360
