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Uniform Trade Secrets Act

Uniform Trade Secrets Act

Important Terms in the Uniform Trade Secrets Act

The Uniform Trade Secrets Act specifically makes misappropriation and improper means illegal.  These terms are provided below:

§1.1 Improper Means

“theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means”

§1.2 Misappropriation

“(i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means”

“(ii) disclosure or use of a trade secret of another without express or implied consent by a who

(A) used improper means to acquire knowledge of the trade secret; or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who has utilized improper means to acquire it; or

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit is use; or

(C) before a material change of his position, knew or had reason to know that it was a trade secret ad that knowledge of it had been acquired by accident or mistake”

§1.4 Trade Secret

“means information, including a formula, pattern, compilation, program device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from no being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

When a Trade Secret Becomes Nonexistent under the Uniform Trade Secrets Act

Although numerous parties may hold rights to a trade secret, the trade secret does not exist in the following cases:

·         when the trade secret become common knowledge within the industry that profits from the secret

·         a party reverse engineers the trade secret

Injunctive Relief and Damages under the Uniform Trade Secrets Act

§2 of the Act state that “Actual or threatened misappropriation may be enjoined.”  The action is limited to when the trade secret exists and a reasonable amount of time to eliminate any competitive advantage if the trade secret was obtained through misappropriation. 

§3 states, “Damages can include both the actual loss caused by misappropriation and the unjust enrichment by misappropriation that is not taken into account in computing actual loss.”  If malicious misappropriation exists §3(b) states “the court may award exemplary damages in the amount not exceeding twice any award made under subsection (a).”

Preservation of Secrecy and Statute of Limitations

§5 and §6 of the Uniform Trade Secrets Act state that a court must take reasonable means to protect a trade secret during discovery proceedings and similar actions.  §6 states that case for misappropriation must occur within 3 years the misappropriation was discovered. 

Source: https://euro.ecom.cmu.edu/program/law/08-732/TradeSecrets/utsa.pdf