MIAMI BUSINESS LITIGATION: CIVIL SEIZURE REMEDY UNDER THE DEFEND TRADE SECRETS ACT

Trade secret claims often arise in business litigation under federal and state law. The Defend Trade Secrets Act (DTSA) provides parties with opportunities to pursue trade secret misappropriation claims in a federal forum. Florida’s Uniform Trade Secret Act (FUTSA) is substantially similar to DTSA and specifically recognizes that it “shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.” Section 688.009, Florida Statutes. Trade secret law is generally uniform between states. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

DTSA defines a “trade secret” as information which “the owner thereof has taken reasonable measures to keep such information secret; and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information”). By comparison, FUTSA§ 688.002 (4), Florida Statutes (defining “trade secret” as information which [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy”).

Federal courts in Florida will generally interpret these substantive provisions in the same way. M.C. Dean, Inc. v. City of Miami Beach, Florida, 199 F. Supp. 3d 1349 (S.D. Fla. 2016). The similarity between FUTSA and DTSA provides Florida business litigation plaintiffs with flexibility in terms of their forum. Unlike trade secret claims under state laws like FUTSA, claims under DTSA may be brought in federal court as a “federal question.”

The remedies available to litigants under FUTSA and DTSA are nearly identical. DTSA permits aggrieved plaintiffs the opportunity to be awarded an injunction, damages, as well as double damages and attorneys’ fees when a defendant “willfully and maliciously” misappropriated a trade secret. Likewise, Section 688.004-005 provides similar relief under FUTSA. However, DTSA uniquely permits business litigation plaintiffs the opportunity to request that the court seize things to ensure that a trade secret is not disclosed. This is distinct from an injunction because it is enforced through direct action by federal law enforcement personnel, rather than through the traditional civil contempt process in court. To prevail, plaintiffs must show that an injunction would not be sufficient to protect the misappropriation of a trade secret, an irreparable injury would occur if seizure was not ordered, the balance of the harms is in favor of a seizure, and “the person against whom seizure would be ordered, or persons acting in concert with such person, would destroy, move, hide, or otherwise make such matter inaccessible to the court, if the applicant were to proceed on notice to such person and the applicant has not publicized the requested seizure.” 18 U.S.C. § (b)(2)(A).

While the seizure remedy under DTSA can be powerful, it is also particularly difficult for a party to demonstrate its right to this remedy. Indeed, most, if not all, courts within the Eleventh Circuit Court of Appeals have routinely rejected claims for seizure under DTSA. For example, in Hayes Healthcare Services, LLC v. Meacham, the United States District Court for the Southern District of Florida denied a request for seizure under DTSA because the defendant in question agreed to provide all alleged trade secret material. 2019 WL 2637053 (S.D. Fla. Feb. 1, 2019). Similarly, Balearia Caribbean Ltd., Corp. v. Calvo also denied requests for a civil seizure of a party’s laptop under DTSA because the enjoined party later agreed to produce the laptop for a forensic examination on his own accord. 2017 WL 8780944 (S.D. Fla. Aug. 3, 2017).

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.