DTSA at 10: Uniform Standard Remains Elusive Amid Circuit Splits

A decade after its passage, the Defend Trade Secrets Act (DTSA) has successfully shifted more trade secret litigation into federal court but has failed to create the single, national standard Congress envisioned. Analysis of the statute's first ten years reveals significant and unresolved circuit splits on fundamental issues, creating strategic complexity for businesses. For example, courts are divided on how specifically a plaintiff must identify an alleged trade secret at the pleading stage and whether a defendant's "avoided costs" can be recovered as unjust-enrichment damages without the plaintiff proving its own corresponding loss. The Seventh Circuit has also endorsed a broad extraterritorial reach for the statute, a position not yet tested elsewhere, creating further uncertainty for global companies. Looking ahead, the rise of artificial intelligence presents new challenges, raising questions about whether AI-generated output can be a trade secret and what security measures are now considered "reasonable." Businesses should monitor these splits and emerging AI-related doctrines when formulating litigation strategy and internal IP protection policies.