Prof Eric Goldman has released his new article titled Ex parte Seizures and the Defend Trade Secrets Act. The article dives into what Goldman calls the “quirky and unprecedented ex parte procedure” included within the proposed legislation that would allow “trade secret owners to obtain a seizure order.” The ex parte portion is important — the seizure order would allow an owner to take action without giving the accused violator a chance to respond. Goldman acknowledges that the provision is much weaker than its 2014 version, but still argues that ex parte seizure is problematic:
More generally, the fact-based disputes that inevitably must be resolved in trade secret litigation make trade secrets an especially poor basis for ex parte actions. As a result, we should be nervous about the proposed seizure provision in the Defend Trade Secret Act—and all other ex parte seizure procedures in trade secret cases.
Documents:
Goldman notes that, on this particular issue, the DTSA is certainly an expansion of rights since “[n]o state trade secret law has a trade secret-specific ex parte seizure process similar to the Seizure Provision.” (To be clear, seizures go a major step beyond emergency temporary-restraining-orders).
Of course, a difference with the DTSA its national level implementation. That difference could be relevant to the seizure provisions — since it is the federal government (not individual state governments) that have an extensive customs and homeland security regime and it is the federal government (not individual state governments) that has expertise in espionage. In my mind, these distinctions do make some difference – until you realize that criminal espionage and foreign export of trade secret information are already covered by Federal Criminal Trade Secret laws. The DTSA is about civil law — and largely about large companies trying to control the flow of information, control former employees, and skirt restrictions in-place in California law.
I expect that before it passes that Prof. Goldman’s arguments will be heard and the Seizure provision removed — of course, that decision is well above my pay grade.
Not to take any position on this specific issue, or to disagree with the argument that less added new remedies not already available under state court proceedings might make passage of this legislation easier.
However, it is important to note that ex parte seizure orders have been granted and used in federal trademark civil suits against product or trademark label counterfeiters and/or their marketers for many years. It is not considered “quirky and unprecedented.” It is often the only way to prevent a perpetrator from concealing or destroying the self-incriminating evidence.
More evidence that this trade secrets law is blatantly unconstitutional? Shock!
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