Pub. 9 2019 Issue 2

10 www.azbankers.org A CCORDING TO A 2017 STUDY, 74 PERCENT OF ORGANIZATIONS FEEL VULNERABLE TO INSIDER THREATS TO THEIR CONFIDENTIAL AND PROPRIETARY INFORMATION, AND 56 PERCENT BELIEVE THAT INSIDER ATTACKS HAVE BECOME MORE FREQUENT IN THE PAST YEAR. 1 A MAJORITY OF ORGANIZATIONS ALSO THINK THAT PRIVILEGED USERS OF SENSITIVE INFORMATION – SUCH AS MANAGERS – ARE THE MOST LIKELY TO ENGAGE IN INSIDER ATTACKS, WITH CONTRACTORS, CONSULTANTS AND REGULAR EMPLOYEES NOT FAR BEHIND. 2 Are these concerns about insider data breaches warranted? The clear answer is yes. According to study results from Symantec, IBM and the U.S. Secret Service, not only are these concerns valid, but many organizations do not fully appreciate the pervasive problem that is insider attacks on sensitive data. Symantec has reported, for example, that at least 50 percent of employ - ees leaving their jobs retain confidential data from their former employers, and 40 percent intend to use such data in their new jobs. 3 That study also Data Breach and the Defend Trade Secrets Act By Cameron Johnson & Taylor Burgoon revealed that most employees do not believe that stealing company data is wrong. IBM has reported that about 60 percent of data breaches are carried out by insiders, 4 and the 2017 U.S. State of Cyber Crime report indicates that about 50 percent of organizations fall victim to at least one insider attack each year. 5 So why should Arizona attorneys care about any of these statistics? On May 11, 2016, the Defend Trade Secrets Act of 2016 (“DTSA”) was signed into law. It provides a fed - eral cause of action for misappropriation of trade secrets – which, until that time, had been a matter of state law. The January 2017 edition of ARIZONA ATTORNEY MAG - AZINE includes an article about the recently enacted DTSA, including the reasons for its enactment, its unique features and the various differences and similarities be - tween the DTSA and the Arizona Uniform Trade Secrets Act. 6 Since then, over 457 DTSA claims have been filed in federal court alone, and courts have published opinions interpreting and applying some of the key provisions of the statute. These developments in the law are critical for attorneys to help clients make the most informed and effective decisions relating to trade secret litigation. Takeaways From DTSA Court Rulings 1. Jurisdictional Considerations and Implications In deciding whether to bring a DTSA claim, plaintiffs should be aware of the jurisdictional implications. The DTSA provides for original jurisdiction such that claims may be filed in federal court, but federal jurisdiction is not exclusive. This means that plaintiffs may bring DTSA claims in state court, however, those claims are suscepti- ble to removal to federal court. Therefore, plaintiffs and their counsel should consider carefully the significant distinctions between Arizona state court and federal court and how those differences may affect their claims. Injunctive Relief Standards. The injunctive relief stan- dard in federal court is more stringent than the standard in Arizona state court. A plaintiff in federal court must show “he is likely to suffer irreparable harm in the absence of preliminary relief,” 7 whereas in Arizona state court a plaintiff need only establish “the possibility of irreparable