Note from AmeriKat: US Senate passes Defend Trade Secrets Act, while patent legislation lingers in Congress

The AmeriKat's surprised face in reaction to the
Senate actually achieving something by passing the
Defend Trade Secrets Act

Last Monday, the US Senate unanimously passed S.1890, the Defend Trade Secrets Act (DTSA).  The DTSA provides for a long overdo federal action for trade secret misappropriation and, importantly, an ex parte seizure order.   In a statement, the Obama administration declared its strong support for the Senate passage of the DTSA stating that:

"Effective protection of trade secrets promotes innovation that is the engine of the Nation’s economy and minimizes threats to American businesses, the U.S. economy, and national security interests. S. 1890 would establish a Federal civil private cause of action for trade secret theft that would provide businesses with a more uniform, reliable, and predictable way to protect their valuable trade secrets anywhere in the country. 

The Administration has placed high priority on mitigating and combating the theft of trade secrets, as exemplified in the Administration’s Joint Strategic Plan on Intellectual Property Enforcement, the Administration’s Strategy on Mitigating the Theft of U.S. Trade Secrets, and Executive Order 13694 authorizing sanctions on those who perpetrate cyber-enabled trade secret theft. S. 1890 would provide important protection to the Nation’s businesses and industries, including through the establishment of a Federal civil cause of action for trade secret misappropriation which would effectively build upon current Federal law and various State laws that have largely adopted the Uniform Trade Secrets Act. As such, the Administration strongly supports the Defend Trade Secrets Act of 2016 and looks forward to working with the Congress on this important piece of legislation as it moves through the legislative process."

The bill will next face the House.   It is hoped that given the bipartisan and unanimous passage of the DTSA in the Senate, the House will also quickly pass the legislation notwithstanding the otherwise emotive and partisan environment surrounding this election year.  For more information see the IPKat's articles on the DTSA and James Pooley's excellent article in IP Watchdog following the Senate vote.

In the meantime, both houses have been wrestling (or not, as the case may be) with various patent legislation.  Amongst these, just introduced at the end of March 2016 by Senators Jeff Flake (Republican -Arizona), Cory Gardener (Republican - Colorado) and Mike Lee (Republican - Utah),  is the VENUE Act (otherwise known as S.2733 - the Venue Equity and Non-Uniformity Elimination Act).  The VENUE Act requires a plaintiff in a patent infringement action to sue in the district where

• the defendant has his principal place of business;

• the defendant has a regular and established physical facility that gives rise to the act of infringement (i.e. manufacturing);

• the defendant has agreed to be sued;

• the inventor conducted the R&D that led to the patent; or

• where a party has a regular and established facility where it either engaged in the R&D that led to the patent, where it manufactures the patented tangible product or where it implements the patented manufacturing process.

Currently, a patentee can commence a patent infringement action in any district where the defendant resides or does business (i.e. where its products or services are available) (see Federal Circuit's 1994 decision in Beverly Hills Fan Company v Royal Sovereign ) and VE Holding v Johnson Gas (Fed Cir 1990).  The rules have made it possible for the Eastern District of Texas, for example, to become so popular (for an entertaining 11 minutes, see John Oliver's Last Week Tonight on Patents).  The goal of the VENUE Act is to limit the ability for patentees to abusively forum shop (which can be interpreted as stopping patent trolls from targeting patentee friendly courts).  Similar legislation was introduced in the Innovation Act (H.R. 9 - see also here), but that has stalled (as has the companion PATENT Act (S.1137) before the Senate).  Some commentators consider that the VENUE Act is an attempt to get some form of patent reform through the 114th Congress before everyone loses interest to the election.  By dedicating itself to only one issue, instead of several, this may increase its prospects of success.