What are the two ways to protect trade secrets under state law?
2007/// Filed in: Trade Secrets
Trade secrets (i.e. any formula, pattern, device, or compilation of information of economic value treated in confidentiality) are protected by state law in two ways: 1) misappropriation and 2) contract law. Trade secret law is primarily derived from common law, state statues, federal law, and the Restatement of Torts. State laws prohibit the misappropriation of trade secrets. Under the Uniform Trade Secrets Act of 1975 (amended in 1985) misappropriation is defined as "(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; or (ii) disclosure or use of a trade secret of another without express or implied consent by a person 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; (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 its 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."
The Uniform Trade Secrets Act does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, and/or (3) criminal remedies, whether or not based upon misappropriation of a trade secret. Consequently, trade secrets are also protected under the principles of state contract law. Companies are advised to require the relevant parties to enter into a contract that includes a confidentiality or nondisclosure agreement.
Finally, in addition to the protection granted by state law, since 1996 trade secrets are also protected by federal law under the Economic Espionage Act of 1996.
References:
[1] Stim, R. "Intellectual Property. Patents, Trademarks, and Copyrights" West Legal Studies.
[2] Black's Law Dictionary 5th ed., (West Publishing, 1979).
[3] Uniform Trade Secrets Act of 1975 (amended in 1985)
[4] Economic Espionage Act of 1996
The Uniform Trade Secrets Act does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, and/or (3) criminal remedies, whether or not based upon misappropriation of a trade secret. Consequently, trade secrets are also protected under the principles of state contract law. Companies are advised to require the relevant parties to enter into a contract that includes a confidentiality or nondisclosure agreement.
Finally, in addition to the protection granted by state law, since 1996 trade secrets are also protected by federal law under the Economic Espionage Act of 1996.
References:
[1] Stim, R. "Intellectual Property. Patents, Trademarks, and Copyrights" West Legal Studies.
[2] Black's Law Dictionary 5th ed., (West Publishing, 1979).
[3] Uniform Trade Secrets Act of 1975 (amended in 1985)
[4] Economic Espionage Act of 1996