THE DEFEND TRADE SECRETS ACT Remedies Under the Act The DTSA includes a number of remedies for misappropriation of trade secrets, including injunctive relief; monetary damages; double or punitive damages for willful and malicious misappropriation; and the provision for ex parte seizures. Injunctions Regarding injunctions, the DTSA provides that an injunction may be granted “to prevent any actual or threatened misappropriation,” 7 and that a court may require affi rmative ac-tion to protect the trade secret, bar disclosure of the trade secret, or condition future use of the trade secret upon payment of a reasonable royalty. 8 The Act also provides for certain restric-tions on injunctive relief, including that the injunction may not prevent anyone from entering into an employment relationship (seemingly attempting to eradicate the “inevi-table disclosure” doctrine), and the injunction may not confl ict with applicable state laws regarding restraints on trade. 9 Monetary Damages The DTSA provides that damages are avail-able under the Act for the recovery of actual losses; any unjust enrichment that is not compensated by the actual losses; a reasonable royalty for unauthorized disclosure or use of the trade secret; and exemplary damages of up to double the compensatory award in the case of willful or malicious appropriation, as well as attorney’s fees for willful or malicious misappropriation. 10 Ex Parte Seizures Upon a showing of “extraordinary circum-stances,” the Act provides that an ex parte sei-zure order may be requested to seize “proper-ty necessary to preserve evidence or to prevent the propagation or dissemination of the trade secret” at issue. The legislative history refl ects that the drafters of the DTSA specifi cally contemplated the use of the ex parte seizure order in cases where “a defendant is seeking to fl ee the country or planning to disclose the trade secret to a third party immediately or is otherwise not amenable to the enforcement of the court’s orders.” 11 To seek relief, an applicant must make a proper showing based on an affi davit or veri-fi ed complaint of immediate and irreparable injury; that the potential harm to the plaintiff www.vsb.org outweighs the interests of the defendant and/ or third parties; that a Rule 65 injunction would not be suffi cient; likelihood of success on the merits; the person against whom the order is sought has actual possession of the trade secret or property to be seized; and such person “or persons acting in concert with such person, would destroy, move, hide, or otherwise make such matter inaccessible to the court, . . .” 12 The court must make certain fi ndings (i.e., narrowest seizure possible, require secu-rity by applicant), and a neutral law enforce-ment offi cial serves the seizure order (along with the papers that the applicant submitted to obtain the order). 13 Any materials seized are retained in the custody of the court; the court must hold a seizure hearing within seven days; and the court must protect the seized materials from being disclosed to the public or destroyed or damaged while in the custody of the court. 14 A motion to dissolve or modify the seizure order may be fi led at any time by the person harmed, and if a seizure order is wrongful or excessive, the person harmed may bring a cause of action to recover damages, including punitive damages and attorney fees. 15 Whistleblower Protections The Act also includes protections for whis-tleblowers, including circumstances where an individual has disclosed the trade secret “in confi dence,” directly or indirectly, to federal, state, and local government offi cials; or to a lawyer and did so “solely for the purpose of reporting or investigating a suspected viola-tion of law;” or in a document fi led in court under seal; or in anti-retaliation lawsuits, pro-vided that the information is disclosed only to an individual’s lawyer, is fi led under seal, and is not disclosed except by court order. 16 The DTSA also requires an employer to “provide notice of the immunity . . . in any contract or agreement with an employee that governs the use of a trade secret or other confi dential information.” 17 This provision applies to all contracts entered into or updat-ed after the date of enactment (May 11, 2016) and applies to employees, contractors, and consultants. 18 If an employer fails to provide such notice, the employer “may not be award-ed exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b) (3) in an action against an employee to whom notice was not provided.” 19 INTELLECTUAL PROPERTY LAW | Vol. 67 | April 2019 | VIRGINIA LAWYER 27