Yesterday the Senate unanimously passed a statute creating a federal cause of action for the violation of trade secret. I do not know what the prospects are for this legislation in the House, but I want to express my opposition to the bill.
In general, I take a dim view of federal statutes that seek to take over regulation traditionally handled by the state common law. There are situations where that is warranted, but this is not one of them. Trade secret protection is in place in every state, and there is no reason to think that this system is inadequate.
Naturally, companies often prefer one national standard to many state standards, but in my view that does not justify federal action. An article from Reuters commenting on the bill stated that trade secret cases are currently “relegated to state courts,” which is not the way I would describe federalism but does accurately describe the attitude behind the statute from Republicans and Democrats.
I hope the House decides not to take up this legislation.