2 minute read | May.20.2020
Last week, we examined the recent Third Circuit decision in Advanced Fluid Systems, which held that a trade secrets plaintiff did not need to be an owner or a licensee of the alleged trade secrets to bring a state law misappropriation claim under Pennsylvania’s UTSA—all that was required was that the plaintiff had “lawful possession” of the trade secrets. In so holding, the Third Circuit added to the weight of the Fourth Circuit’s similar analysis of Maryland’s UTSA in DTM Research, L.L.C. v. AT&T Corp., 245 F.3d 327 (4th Cir. 2001).
But this “lawful possession” standard may not withstand challenge under all circumstances. The language of the federal DTSA, for example, provides that only a trade secret “owner,” which includes licensees, may bring a misappropriation claim. And, under the Louisiana UTSA, only a trade secret owner may bring a misappropriation claim. See Gabriel Int’l, Inc. v. M&D Indus. of Louisiana, Inc., 719 F. Supp. 522 (W.D. La. 1989).
Given this landscape, how should a company properly assess and manage its risks?