USA Law and Practice Contributed by: Claudia Ray, Joseph Loy, Brandon R. Weber and Andrew (Keum Yong) Lee, Kirkland & Ellis LLP
communication between the parties. Whether in anticipation of litigation or not, a trade secret owner may find it useful to send notices to for - mer employees that go on to work for the trade secret owner’s competitors, reminding the for - mer employee of their confidentiality obligations. The trade secret owner may likewise benefit from sending a notice to the former employee’s new employer, to put the new employer on notice that the former employee had access to the trade secret owner’s confidential information and remains under an obligation to maintain its secrecy. A complaint alleging trade secret misappropria - tion under the DTSA, like any pleading in fed - eral court, requires the submitting attorney to conduct a reasonable inquiry before filing, and courts may impose sanctions if the pleading is found to have been presented for an improper purpose, such as harassing the defendant, or if the factual contentions are unlikely to have evi - dentiary support after a reasonable opportunity for further investigation or discovery; see Fed - eral Rules of Civil Procedure (FRCP) 11(b). Most state courts impose similar obligations. 5.2 Limitations Period According to both the DTSA and the UTSA, a misappropriation claim must be brought within three years after the misappropriation was dis - covered or should reasonably have been discov - ered (18 USC Section 1836(d); UTSA Section 6). The particular facts that can put a trade secret owner on notice of a trade secret misappropria - tion claim vary, but generally, a trade secret own - er should diligently investigate any objectively reasonable suspicions that its trade secrets have been disclosed improperly or used without con - sent. Another factor to consider when bringing
DTSA claims is the timeline of the misappropria - tion and use of the trade secrets at issue. Although there is uncertainty in this area, some courts have found that pre-enactment misap - propriation may still be redressed by the DTSA if there are instances of use of the trade secrets occurring after enactment. For example, the DTSA is likely still available if the theft of a trade secret occurred prior to 11 May 2016 but the use or disclosure of the misappropriated trade secret occurred after the effective date of the DTSA. See Syntel Sterling Best Shores Mauritius Ltd v TriZetto Grp, Inc, 2021 WL 1553926 (S.D.N.Y. Apr. 20, 2021). If all of the activity constituting the trade secret misappropriation occurred prior to 11 May 2016, however, the trade secret plain - tiff may be limited to bringing claims under state law. 5.3 Initiating a Lawsuit An owner of a trade secret may file a complaint under either the DTSA or state trade secret laws (most of which conform to the UTSA) in federal or state court. The DTSA’s jurisdictional element requires the asserted trade secret to be related to a product or service that is used or intended for use in interstate or foreign commerce (18 USC Section 1836(b)(1)). The DTSA and most forms of the UTSA permit three theories of misappropriation: (i) uncon - sented use, (ii) acquisition, or (iii) disclosure of a trade secret by a party who used improper means to acquire the trade secret, or who knows or has reason to know that the trade secret was acquired by improper means (see Onyx Renew - able Partners L.P. v Kao, No 22-CV-3720 (RA), 2023 WL 405019, at *4 (S.D.N.Y. Jan. 25, 2023)). New York law more narrowly requires that the defendant uses the trade secret in order for a
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