Can a court seize property from someone that stole trade secrets?
Yes. Federal law permits courts to order the U.S. Marshals to seize property from a defendant accused of stealing trade secrets, but only in “extraordinary circumstances.” Courts are mindful of the significant hardship that seizure imposes, and thus set a high bar for obtaining it. To show extraordinary circumstances, the party seeking seizure must prove that other measures—including a court order prohibiting use of the trade secrets—will not suffice to prevent irreparable injury because the defendant would “destroy, move, hide, or otherwise make ... inaccessible” the property to be seized.
Courts look for evidence that a defendant is willing and able to violate a court order before permitting seizure. That evidence typically takes one of three forms. First, defendants may have a history of dishonesty. For example, they may have lied about transferring a trade secret to a new electronic device. Second, defendants may have previously destroyed evidence of theft of trade secrets, suggesting a willingness to do so again in response to any court order. Third, defendants may have disobeyed prior court orders, including by attempting to evade service of process. These types of evidence, either alone or in combination, may lay the foundation required to obtain a seizure order.
Even if a court finds that measures other than seizure will not prevent irreparable harm to the plaintiff, it still cannot order seizure unless the irreparable harm at issue outweighs the injury seizure would cause to the defendant and any third parties. That can be a significant hurdle, particularly where the property to be seized is necessary to the operation of the defendant’s business. And any seizure a court authorizes must be narrowly tailored to the harm the plaintiff seeks to prevent. These strict requirements further narrow the “extraordinary circumstances” in which seizure may occur.
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