Making a Federal Case out of Trade Secrets
“The most important change was that DTSA allowed someone claiming their trade secret was being used improperly to go into a federal court,” explained Jacoby. “In most situations, the employer and the employee in a trade secret dispute are likely to be in the same state. Usually, two citizens of the same state can’t bring a lawsuit into a federal court unless an independent basis for federal jurisdiction over the case exists. So, if my client wants to sue the business next door to his yoga school for blasting out heavy metal during his meditation classes, I literally can’t make a federal case out of it.” However, DTSA changed that rule for trade secret protection — that claim now can be brought into a federal court even if the parties are both from the same state. Up until DTSA, that only happened if you had some other jurisdictional basis to be in federal court, such as the parties were from different states and met the jurisdictional amount for a diversity claim, or perhaps if you sued under another federal statute relating to IP.