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for unjust enrichment; in lieu of damages,
a reasonable royalty for unauthorized
disclosure or use; exemplary damages
up to two times the amount of awarded
damages in cases of willful or malicious
misappropriation; and reasonable attorneys’
fees in cases of willful and malicious
misappropriation. 6 Importantly, attorneys’
fees are also available to a defending party
who is able to establish that a claim for
misappropriation was made in bad faith. 7
The DTSA also provides civil and
criminal whistleblower immunity to
individuals in three key instances: ( 1) for
any confidential disclosure of a trade secret
to a government official for the sole purpose
of reporting or investigating a suspected
violation of law; ( 2) for a disclosure of a trade
secret that is made in a complaint or other
document filed in a lawsuit or proceeding
if the filing is made under seal; and ( 3) for
disclosing a trade secret to an attorney or in
a court proceeding in a retaliation lawsuit
brought against an employer for reporting a
suspected violation of law, provided that any
document containing a trade secret is filed
under seal and not disclosed except pursuant
to court order. 8
Business owners must publicize this
whistleblower immunity to an employee
before receiving any award of exemplary
damages or attorneys’ fees in an action
against the employee. 9 Specifically, the
DTSA creates a requirement for employers
to provide notice of this immunity “in any
contract or agreement with an employee
that governs the use of a trade secret or
other confidential information.” 10 The notice
requirement may be satisfied by providing
a cross-reference to a policy document
provided to the employee that sets forth the
employer’s reporting policy for a suspected
violation of law, and it applies to contracts or
agreements entered into or updated after the
effective date of the DTSA (May 11, 2016).
“employee” includes not just employees, but
contractors and consultants as well. 11
There are several key distinctions
between the DTSA and the GTSA. Most
significantly, the DTSA permits, under
extraordinary circumstances, ex parte
seizure of property necessary to prevent the
propagation or dissemination of the trade
secret. 12 The property potentially subject to
seizure goes beyond just the trade secrets
themselves. 13 The party requesting such
extraordinary relief must submit an affidavit
or verified complaint satisfying the rigorous
requirements of the statute, and the court
must set a hearing “at the earliest possible
time, and not later than seven days after the
order has issued” unless the seized party
consents to another date. 14 To award this
“extraordinary” relief, a court must make
specific findings beyond the requirements
for an injunction or temporary restraining
order. 15 Specifically, a court must find that
any other form of equitable relief could not
satisfy the need for relief “because the party
to which the order would be issued would
evade, avoid, or otherwise not comply with
such an order.” 16 In the DTSA’s first year
of passage, courts were reluctant to find
extraordinary circumstances and to grant
requests for seizures. 17
Although injunctive relief is permitted,
an injunction may not “prevent a person from
entering into an employment relationship,”
and any conditions or restrictions placed
on any employment “shall be based on
evidence of threatened misappropriation
and not merely on the information the
person knows.” 18 This is often referred to
as the “inevitable disclosure” doctrine,
i.e., enjoining a former employee from
entering into an employment relationship
based on the argument that the individual
will “inevitably disclose” the alleged trade
secrets as part of his or her new employment.
The DTSA provides only a three-year
statute of limitations from the date of
discovery or when such misappropriation
should have been discovered, as opposed to
five years under the GTSA. Yet the GTSA
provides no whistleblower immunity.
So far, state and federal courts in Georgia
and the Eleventh Circuit tend to analyze
DTSA claims alongside state trade secret
claims without noting any differences. 19
In determining whether to bring
DTSA claims in federal court, a Georgia
practitioner should consider the following,
among other considerations: ( 1) how soon
the federal court could be expected to act on
a request for emergency relief compared to
a state court; ( 2) the existence of state law
claims that could not be brought because
of the GTSA’s preemption; ( 3) the need for
nationwide discovery; ( 4) the necessity and
practicality of an ex parte seizure; ( 5) whether
the specific trade secret claims actually
involve products or services in interstate
commerce; 20 and ( 6) any relevant substantive
differences in the statutory language of the
DTSA compared to the GTSA. 21
1 The GTSA is modeled on the Uniform Trade Secrets
Act, which essentially all states excepting New York and
Massachusetts have—with some tweaks—enacted.
2 See Adams Arms, LLC v. Unified Weapon Sys., Inc., No.
8:16CV1503T33AEP, 2016 WL 5391394, at *6-* 7 (M.D.
Fla. Sept. 27, 2016) (denying the motion to dismiss but
limiting the DTSA claim to prohibited acts after the effective
date of the DTSA).
3 18 U.S.C. § 1836(b)( 1).
4 18 U.S.C. § 1838.
5 18 U.S.C. § 1836(b)( 2).
6 18 U.S.C. § 1836(b)( 3).
7 18 U.S.C. § 1836(b)( 3).
8 18 U.S.C. § 1833(b).
9 18 U.S.C. § 1833(b)( 3).
10 18 U.S.C. § 1833(b)( 3)(A).
11 18 U.S.C. § 1833(b)( 4).
12 18 U.S.C. § 1836(b)( 2).
13 18 U.S.C. § 1836(b)( 2)(A).
14 18 U.S.C. § 1836(b)( 2)(B).
15 18 U.S.C. § 1836(b)( 2)(A)(ii).
16 18 U.S.C. § 1836(b)( 2)(A)(ii)(I).
17 See, e.g., OOO Brunswick Rail Mgmt. v. Sultanov, No.
5:17-CV-00017-EJD, 2017 WL 67119, at 2 (N.D. Cal.
Jan. 6, 2017) (“[S]eizure under the DTSA is unnecessary
because the Court will order that [defendant] must deliver
these devices to the Court at the time of the hearing[.]”).
18 18 U.S.C. § 1836(b)( 3).
19 See, e.g., M.C. Dean, Inc. v. City of Miami Beach, Florida,
199 F. Supp. 3d 1349, 1357 (S.D. Fla. 2016) (dismissing
both state and D TSA trade secret claims); see also Agilysys,
Inc. v. Hall, No. 1:16-CV-3557-ELR, 2017 WL 2903364,
at 11 (N.D. Ga. May 25, 2017) (“[H]aving found that
Plaintiff’=’s G TSA claim will proceed . . . Plaintiff’s DTSA
claim will also proceed[.]”).
20 For example, the D TSA may cover negative know-how about
processes that do not work.
21 For example, the G TSA defines “trade secret” to include “a
list of actual or potential customers or suppliers” while the
DTSA does not specifically include a customer list. Compare
O.C.G.A. § § 10-1-761( 4) with 18 U.S.C. § 1839( 3). As
another example, as noted, the DTSA—but not the GTSA—
expressly limits injunctive relief that encroaches on one’s
ability to work. Compare 18 U.S.C. § 1836(b)( 3)(A) with
O.C.G.A. § 10-1-762.