What if a computer or flash drive contains a trade secret that has been acquired by improper means, and the trade secret is at risk of further unauthorized disclosure or use?  Under the federal Defend Trade Secrets Act of 2016, a trade secret owner may petition a federal court to seize such property without providing advance notice of the seizure.  However, in addition to other requirements, a federal court will not order such a seizure unless:

1. “an immediate and irreparable injury will occur if such seizure is not ordered”‘
2. the harm to the trade secret owner in denying a property seizure outweighs the harm to the person currently in possession of the property if a seizure is ordered;
3. the harm to the trade secret owner in denying a property seizure substantially outweighs the harm to any other third party who may be affected by the seizure;
4. the person in possession of the trade secret (and associated property) likely either misappropriated the trade secret by improper means or conspired to use improper means to misappropriate the trade secret;
5. the trade secret owner must be able to describe the property to be seized and its current location; and
6. the court concludes that the person in possession of the property will “destroy, move, hide, or otherwise make such matter inaccessible to the court” if the person is notified of the court action.

If a federal court orders such a seizure, the court will also require the trade secret owner to post bond to provide payment to the party subject to seizure if the seizure is subsequently determined to have been wrongful or excessive.  In addition, any property seized will initially be held by the court and not by the trade secret owner.

Under emergency conditions with a lot at stake, this may be a valuable new tool for certain trade secret owners under the right circumstances.

[Legal advice not only involves an understanding of the law, but the application of the law to a particular set of circumstances or facts.  Typically blog posts are imperfect tools to address the subtlety and exceptions of the law that may apply in particular situations.  As a result, the information in this blog post does not represent legal advice.  If you are in a situation where you need or desire legal advice, we would be happy to help.  Check out our Contact Us page, and feel free to set-up a no-charge initial consultation.]