Peter J. Toren

Almost five years has passed since the enactment of the Defend Trade Secrets Act (DTSA) on May 11, 2016, which provides for civil relief for the theft of trade secrets. The most controversial provision, 18 U.S.C. § 1836(b)(2), authorizes a federal court to issue an order, in extraordinary circumstances, and upon an ex parte application based on an affidavit or verified complaint, to provide for seizure of property necessary to preserve evidence or to prevent the propagation or dissemination of the trade secret. Thus, the issuance of a seizure order is limited to “extraordinary circumstances.” According to the House Report, the “ex parte seizure provision is expected to be used in instances in which a defendant is seeking to flee the country or planning to disclose the trade secret to a third party immediately or is otherwise not amenable to the enforcement of the court’s orders.” In other words, it is intended to stop the dissemination of a trade secret, especially overseas, before its value has been lost through public disclosure. Thus, it provides a trade secret owner with the ability to mitigate the risk that trade secrets are irrevocably lost, transferred, or moved beyond the jurisdiction of the court.

Two of the most important issues in trade secret cases involve the timing of when the plaintiff is required to identify its alleged trade secrets and the degree of specificity with which they must be identified. However, the Defend Trade Secrets Act (DTSA) fails to address either of these issues, and most state courts have not agreed on unform standards. In comparison, for example, under Section 2019.210 of the California Code of Civil Procedure, a plaintiff is required to identify its alleged trade secrets with reasonable particularity “to limit the permissible scope of discovery by distinguishing the trade secrets from matters of general knowledge in the trade or of special knowledge of those persons skilled in the trade.” Now the Ninth Circuit in InteliClear LLC v. ETC Global Holdings, Inc., 978 F. F. 3d. 653 (9th Cir. 2020) has held that the DTSA also includes the requirement that the plaintiff must identify, depending on the stage of the litigation, with sufficient particularity to provide the defendant with notice as to the identity of the trade secrets at  issue.