Defend Trade Secrets Act and Alabama Non-compete Statute

In an unparalleled effort, the U.S. passed the Defend Trade Secrets Act (DTSA) on May 11, 2016, and the EU passed Directive 2016/943 (EU 943) on June 8, 2016. The two laws are substantially similar and have significant implications to international technology, business and employment.

DTSA created the first US private federal trade secret civil action with nationwide service and enforcement. Similarly, EU 943 created the first private trade secret action applicable across all EU member states. DTSA and EU 943 have several unique requirements and remedies, including seizures, injunctions, confidential proceedings and a variety of available damages. Both also have exclusions for reverse engineering, independent creation, regulatory and whistleblower disclosures, employment injunctions and pre-emption of other laws.

Companies engaged in cross-border business should be aware of the common enforceability of trade secrets and the resulting need to harmonize their operational practices and multijurisdictional litigation strategies with regard to cross-border activities.