A defendant opposing or challenging an injunction under the Defend Trade Secrets Act (DTSA) often has several potential defenses, including arguing that the information at issue is not truly a trade secret, that the injunction is unnecessary or overbroad, or that the defendant simply “didn’t do it.” One argument that should not make the cut, however, is that the DTSA is unconstitutional.
This advice runs counter to a recent New York University Law Review article suggesting that the ex parte seizure provision of the Defend Trade Secrets Act (DTSA) would not survive due process scrutiny and therefore should be eliminated.
Of the hundreds of claims brought under the DTSA since it went into effect in May 2016, we are unaware of any cases where litigants have attacked its constitutionality, much less successfully. Although the note raises some due process concerns that are not unreasonable in theory, challenging the ex parte seizure provision on a constitutional basis likely would be ineffective in practice. Nor should the concerns expressed in the note require any legislative correction.
First, the note argues that the risk of error is much greater in ex parte seizure applications under the DTSA than in ex parte temporary restraining orders (TROs) under Federal Rule of Civil Procedure 65. The supposed increased risk of error is based on the fact-intensive nature of trade secret litigation, and the purported difficulty in deciding whether a trade secret exists without a counter-narrative.