On December 28, 2012, President Obama signed into law the Theft of Trade Secrets Clarification Act. The Act amends the Economic Espionage Act of 1996 (EEA) and expands the jurisdiction of federal courts over cases concerning misappropriation of trade secrets. It was enacted in response to a recent Second Circuit decision that arguably narrowed the jurisdictional scope of the Economic Espionage Act of 1996.

The passage of the EEA (18 U.S.C. §§ 1831-39) marked the first major federal legislation aimed specifically at granting federal courts jurisdiction over claims of trade secret misappropriation. With the enactment of the EEA, Congress gave federal prosecutors a vehicle to bring criminal charges against individuals who knowingly misappropriate trade secrets. 18 U.S.C. § 1832(a). The EEA also provided the federal government the ability to seek injunctive relief for trade secret theft in a civil action under the statute. Id. § 1836.

Prior to the EEA, trade secrets were the subject of state law protections, largely under state-adopted versions of the Uniform Trade Secrets Act. Under that regime, federal courts obtained jurisdiction over such claims solely by means of diversity jurisdiction or through charges under federal criminal statutes stretched to cover trade secret misappropriation. READ MORE →