Monday, July 15, 2013

My Issue With PRATSA: The Rule of Lenity

For the most part, I am deferring extended discussion of the proposed new trade secrets law to my (friendly) competitors, John Marsh of Hahn Loeser and Robert Milligan/Josh Salinas of Seyfarth Shaw. Their posts are excellent and insightful, as usual.

In short, the Private Right of Action Against Theft of Trade Secrets Act (PRATSA) creates a federal civil cause of action for trade secrets misappropriation, something commentators have debated for years. So, too, by the way, did the Fairly Competing hosts - John Marsh, Russell Beck, and me - several weeks back!

As John described in his post, PRATSA is a companion law to Aaron's Law - legislation that would narrow the reach of the Computer Fraud and Abuse Act and eliminate its application to garden-variety misappropriation claims in the workplace. John aptly describes PRATSA and Aaron's Law as a trade-off in that PRATSA expands the potential remedies for trade secrets theft, while Aaron's Law limits the CFAA to traditional forms of computer hacking.

In its current form, PRATSA is styled as an amendment to the Economic Espionage Act, which is in Title 18 of the United States Code dealing with crimes and criminal procedure. And - much like the CFAA (also housed in Title 18) - it would graft onto the statute a civil remedy. The problem, in my opinion, is something known as the rule of lenity.

The rule of lenity is fairly simple in concept: in construing a criminal statute, a court must interpret any ambiguity in favor of the defendant. In CFAA cases, many courts have applied the rule of lenity to narrow the reach of the statute and limit the types of activity that exceed authorized access to a protected computer under the statute. Put simply, the rule of lenity is a thorn in a CFAA plaintiff's side because a defendant simply can rely on a time-honored rule of construction to argue for a narrow interpretation. That argument has worked very well.

The same problem potentially exists with PRATSA.

As Robert and Josh identify in their discussion, the bill does not address many substantive issues - such as damage remedies and fee-shifting. Without further amendments (which seems unlikely), a defendant could argue that common remedies available under state trade secrets law (such as royalty damages) are not available under the rule of lenity. That may discourage plaintiffs from using PRATSA, since it would not displace state civil trade secrets laws.

If PRATSA were to move forward through committee, it seems inevitable that some of the deficiencies would be addressed.

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