Three years ago, the federal Defend Trade Secrets Act (DTSA) became law, supplementing state law claims with a federal civil cause of action for trade secret misappropriation.
DTSA cases making headlines since the statute’s adoption include cases in the food and beverage sector:
- The first DTSA case reported to be tried to a jury involved fig jam products, resulting in a plaintiff’s verdict for the owner against a former distributor and contract manufacturer on trademark and trade dress claims.1 Various posttrial motions were filed raising arguments relating to whether the jury’s monetary award reflected any relief under the DTSA as opposed to the state statute. The case settled before these issues were clarified.
- In another case asserting DTSA and state law claims, a federal district court in Missouri issued a temporary restraining order prohibiting a former executive from one restaurant company from starting work at another restaurant company.2 The DTSA limits the circumstances under which a former employee can be enjoined, providing that an injunction to prevent any actual or threatened misappropriation may not “prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows.” 18 U.S. Code § 1836 (b)(3)(A). The injunction in the Panera v. Nettles case, however, was based on interpretations of state law and the non-compete agreement signed by Nettles, rather than on the DTSA. The court also raised questions regarding Nettles’ handling of Panera materials on his personal laptop, suggesting that at least some of Panera’s concerns and evidence related to misappropriation of data as opposed to just the possibility that Mr. Nettles would use knowledge he had gained while under Panera’s employ. This case also settled before these issues were fully explored.
Even before the DTSA became law, the Economic Espionage Act of 1996, 18 U.S.C. § 1831, et. seq. (EEA), criminalized economic espionage and theft of trade secrets. One significant federal prosecution involved the alleged stealing of trade secrets relating to titanium dioxide production. This may not seem to be related to food or beverages, but in fact the product is “a white pigment extracted from ore and used in a wide variety of products, from paint to the filling in Oreo cookies.”3 The prosecution secured convictions against a U.S. citizen who worked with various Chinese entities and former DuPont employees to develop titanium dioxide production facilities in China, allegedly using DuPont trade secrets. Much debate occurred about whether certain information was secret (and protected as a trade secret) or publicly available (and not protected). On at least the charges of attempt and conspiracy to steal trade secrets, however, “the government need not prove the existence of actual...
