The Defend Trade Secrets Act Isn’t an ‘Intellectual Property’ Law

By Eric Goldman

Posted on March 29, 2017


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Congress worked on the Defend Trade Secrets Act (DTSA) for years, yet the final product has a number of rough edges and curiosities. One example is the following sentence:

 

This section and the amendments made by this section shall not be construed to be a law pertaining to intellectual property for purposes of any other Act of Congress.

 

I know regular blog readers just spit out their coffee and are shouting “WTF?!” Of course trade secrets are an intellectual property; so of course the DTSA is an intellectual property law. How could Congress say otherwise?

 

My new article, cleverly named “The Defend Trade Secrets Act Isn’t an ‘Intellectual Property’ Law,” answers that question in a prolix manner befitting a law professor. The short story is that the sentence preserves the Perfect 10 v. ccBill “salient” in Section 230 jurisprudence, which says that Section 230 can apply to state IP laws–including trade secrets. ccBill is only the law in the 9th Circuit, but nevertheless it’s become a crucial part of Section 230 jurisprudence. The DTSA makes trade secrets a federal claim, which would have functionally eliminated the ccBill salient as applied in the trade secret realm. The DTSA’s curious declaration preserves that salient.

 

It also does a lot more. There are 200+ other federal laws that use the term “intellectual property” and thus are affected by this DTSA sentence. Yes, I read them all. No, there were no showstopper gaffes. Still, the article will take you on a travelogue of ways that Congress has used the term “intellectual property.” If you’re interested in the meaning and scope of the phrase “intellectual property,” this article is for you.

 

This DTSA quirk combines two of my loves, Section 230 and trade secrets, and it’s another example of how Congress can “sideswipe” Section 230 through changes in unrelated laws, so you can see why I *had* to write this article. The article is coming out shortly in the Santa Clara High Tech Law Journal. The abstract:

 

Congress’ passage of the Defend Trade Secret Act is one of the most important developments in intellectual property law over the past decade, yet counterintuitively the statute expressly says it is not an intellectual property law. This apparent paradox should successfully preserve a legal quirk in the law governing liability for user-generated content online. However, Congress’ solution affects over 200 other federal statutes. Fortunately, the implications for those other laws appear to be mostly inconsequential (we hope).

 

Some other works/blog posts related to the DTSA:

 

 

The preceding is republished on TAP with permission by its author, Professor Eric Goldman, Professor of Law and Co-Director of the Santa Clara High Tech Law Institute at Santa Clara University. “The Defend Trade Secrets Act Isn’t an ‘Intellectual Property’ Law” was originally published March 9, 2017 in the Technology & Marketing Law Blog.

 


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