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Defending against trade secrets misappropriation

Since the Defend Trade Secrets Act became law in 2016, companies in Texas have been able to take other parties to federal court when they detect misuse or theft of their trade secrets. Before the DTSA, trade secrets litigation went through state courts.

Companies have experienced an increasing need to protect their proprietary information. Digital technology has enabled people, particularly departing employees, to copy and share intellectual property easily. Low unemployment also gives workers greater freedom to move to new jobs, and companies have needed to defend their rights to trade secrets vigorously as employees come and go.

The life sciences and health care sectors have been especially active with their litigation against people accused of misappropriating trade secrets. Empowered now by federal law to take other parties to federal court, companies in these sectors have represented roughly 7 percent of these cases in the past two years. These companies typically need to defend against the theft of valuable details behind the development of pharmaceuticals and medical devices.

Someone at a company who detects violations of confidentiality or licensing agreements or the outright theft of trade secrets could ask an attorney how to respond. An attorney could recommend business litigation after reviewing the terms of applicable contracts and evidence such as a digital trails left on company computers and servers. After organizing the documentation that details the company's control of certain intellectual property, an attorney could approach the opposing party and demand a cessation of the use of the trade secrets along with a settlement. If this approach does not resolve the problem, then the attorney could prepare the case for presentation at trial.

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