For Immediate Release

Why Small Businesses Should Care About the New Federal Trade Secrets Law

Small Businesses May Benefit From the Defend Trade Secrets Act of 2016

ROLLA, Mo., May 23, 2016 – In May 2016, President Obama signed into law the Defend Trade Secrets Act (DTSA) which extends the Economic Espionage Act (EEA) of 1996. Although big business may have been the impetus for passage of DTSA, small businesses may be able to leverage significant benefits from the new law according to the Small Business & Technology Development Center (SBTDC) at Missouri University of Science and Technology (Missouri S&T).

“Patents, copyrights, and trademarks are usually what come to mind when people talk about intellectual property,” says Malcolm Townes, associate director for the Office of Technology Transfer and Economic Development (TTED) at Missouri S&T. “Trade secrets are often underrated and overlooked as a powerful source of competitive advantage, particularly by small businesses.”

With the passage of the DTSA, the federal government fully recognizes four types of intellectual property. Trade secret owners can now file law suits in federal courts for the first time instead of having to resort to other ill-suited federal laws or relying solely on state trade secrets laws which vary from state to state.

“Many people assume that patents are the strongest form of intellectual property but they’re expensive to obtain which often makes pursuing them impractical for many small businesses. Trade secrets are much more accessible as a form of intellectual property,” says Townes. “Now that the DTSA has been enacted, small businesses may employ trade secrets more aggressively to level the playing field with larger competitors knowing that they can more easily access the federal courts to protect their intellectual property.”

Aside from providing for civil action in federal court, the DTSA institutes several other important changes to federal law according to legal commentators. It generally defines “trade secret” more broadly than state laws do. It defines “misappropriation” more clearly and broadly than the EEA. Additionally, the DTSA allows a plaintiff to seek to have the government seize misappropriated trade secrets without providing advance notice to the defendant which is something that most state laws don’t accommodate. However, it also protects whistle blowers from criminal or civil liability for disclosing a trade secret if the disclosure is made in confidence to a government official or an attorney for the purpose of reporting a violation of law.

In order for information to be considered a trade secret the owner must take reasonable measures to keep the information secret and derive independent economic value from the information not being generally known to other people or businesses that could benefit economically from it. Small businesses that are interested in learning more about the DTSA and how they can incorporate trade secrets into their competitive strategy can obtain assistance from SBTDCs located throughout the nation. Most SBTDC services are provided at no cost to the client. Missouri S&T’s TTED operates an SBTDC which provides business counseling and training to aspiring entrepreneurs and small business owners to help them address a variety of issues, including trade secrets. Those interested in obtaining more information or obtaining business counseling should visit


Mr. Malcolm Townes

Associate Director

Office of Technology Transfer and Economic Development