Choosing the right forum to bring a lawsuit is a critical first step in defending and protecting your trade secrets. For Virginia companies fighting trade secrets misappropriation, there will usually be the option of proceeding either in federal court—including the Eastern District of Virginia—or in Virginia state court. This blog post will cover the various advantages of proceeding with the DTSA case in federal court compared to proceeding in Virginia state court under the VUTSA.
Federal Jurisdiction and Nationwide Protection
As a federal statute, the DTSA provides access to federal jurisdiction and an injunction in federal court can be enforced nationwide. This can be particularly valuable if your trade secrets extend beyond Virginia.
Access to federal jurisdiction also provides for the availability of other federal statutes. Many trade secrets cases involve overlapping or parallel claims of infringement of other forms of intellectual property, such as trademarks, copyrights, and patents. Federal court allows you to bring these claims together, and through supplemental jurisdiction, you could also potentially bring your state law claims into a federal lawsuit alongside your federal claims. Whereas in state court, raising federal claims may subject your lawsuit to removal to federal court.
In short, federal jurisdiction can often provide increased flexibility and access in terms of the claims you can raise in your lawsuit.
Uniformity of Federal Rules and Broader Applicability of Case Law
Another benefit of federal courts is uniformity of the Federal Rules of Civil Procedure, which apply to all federal courts. Given that the DTSA is a federal statute that is applied nationwide, there is also a greater body of case law and precedent that is available pertaining to federal trades secrets cases. These uniform rules and broader case law allow for greater predictability and consistency in trade secrets cases.
The Eastern District of Virginia (EDVA)
The EDVA has a busy intellectual property docket, given that the United States Patent and Trademark Office is located in Alexandria, Virginia. The EDVA’s extensive dealing with the DTSA and other intellectual property cases allows for increased predictability and consistency with respect to trade secrets and intellectual property disputes. Moreover, the EDVA, aptly known as the “Rocket Docket,” is one of the fastest trial courts in the country. Trade secrets cases are time sensitive by their very nature, so having a strict case timeline that offers swift resolution can provide distinct advantages.
The DTSA provides remedies including injunctive relief, damages for actual loss caused by trade secrets misappropriation, and damages for any unjust enrichment occurring as a result of trade secrets misappropriation that are not accounted for in computing actual damages. For willful and malicious appropriation, the DTSA also provides for double damages and attorney’s fees. In exceptional circumstances, the DTSA allows for ex parte seizure of misappropriated trade secrets, however this type of extraordinary relief is more difficult to obtain.
Litigants seeking to protect their trade secrets under the DTSA should be aware, however, that claims of misappropriation made in “bad faith” can result in an award of attorney’s fees to the defendant if they prevail.
Deciding whether to file a trade secrets case in federal court under the DTSA or in Virginia state court under the VUTSA is a fact-specific inquiry, and requires a case-by-case analysis. While state court may provide benefits in terms of familiarity and locality, federal court proceedings under the DTSA can offer advantages of nationwide protection, predictability and consistency, and expedited timelines. The additional advantages of proceeding in the Eastern District of Virginia—assuming there is jurisdiction—should also not be overlooked.