/* BBS LEGAL GUIDE COMMENTARY: The text of the 1985 Amended

Uniform Trade Secrets Act follows, with comments. Please bear in

mind that this is the UNIFORM TEXT, and that each state has made

changes to the uniform text. This text is quite important for

employer/employee relations since it defines protection of trade

secrets in the absence of contract terms and provides the sole

source of criminal penalties for unlawful breach of trade

secrets. */

SECTION 1

As used in this [Act], unless the context requires otherwise:

(1) "Improper means" includes theft, bribery,

misrepresentation, breach or inducement of a breach of a duty to

maintain secrecy, or espionage through electronic or other means;

/* The list of "improper means" is not all-inclusive. */

(2) "Misappropriation" means:

(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 had

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 [or her]

position, knew or had reason to know that it was a trade secret

and that knowledge of it had been acquired by accident or

mistake.

(3) "Person" means a natural person, corporation, business

trust, estate, trust, partnership, association, joint venture,

government, government subdivision or agency, or any other legal

or commercial entity.

/* Note that the government is supposed to keep trade secrets

secret. However, don't take this too seriously since in many

states you won't be able to sue to enforce your supposed right.

There are many hazards when dealing with the government as a

customer for software or computer services, including "freedom of

information" acts that may make a contract supposedly keeping

your code secret a nullity and useless. */

(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 not 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.

/* Trade secrets under this definition include confidential

information not based on inventions or engineering such as

customer or prospect lists, or other customer information. */

SECTION 2. INJUNCTIVE RELIEF

(a) Actual or threatened misappropriation may be enjoined.

Upon application to the court, an injunction shall be terminated

when the trade secret has ceased to exist, but the injunction may

be continued for an additional reasonable period of time in order

to eliminate commercial advantage that otherwise would be derived

from the misappropriation.

(b) In exceptional circumstances, an injunction may

condition future use upon payment of a reasonable royalty for no

longer than the period of time for which use could have been

prohibited. Exceptional circumstances include, but ar are not

limited to, a material and prejudicial change of position prior

to acquiring knowledge or reason to know of misappropriation that

renders a prohibitive injunction inequitable.

(c) In appropriate circumstances, affirmative acts to

protect a trade secret may be compelled by court order

3. DAMAGES

(a) Except to the extent that a material and prejudicial

charge of position prior to acquiring knowledge or reason to know

of misappropriation renders a monetary recovery inequitable, a

complainant is entitled to recover damages for misappropriate.

Damages can include both the actual loss caused by

misappropriation and the unjust enrichment caused by actual loss.

In lieu of damages measured by any other methods, the damages

caused by misappropriation may be measured by imposition of

liability for a reasonable royalty for a misappropriator's

unauthorized disclosure or use of a trade secret.

(b) if willful and malicious misappropriation exists, the

court may award exemplary damages in an amount not exceeding

twice any award made under subsection (a).

4. ATTORNEY'S FEES

If (i) a claim of misappropriation is made in bad faith,

(ii) a motion to terminate an injunction is made or resisted in

bad faith, or (iii) willful and malicious misappropriation

exists, the court may award reasonable attorney's fees to the

prevailing party.

5. PRESERVATION OF SECRECY

In an action under this [act], a court shall preserve the secrecy

of an alleged trade secret by reasonable means, which may include

granting protective orders in connection with discovery

proceedings, holding in-camera hearings, sealing the records of

the action, and ordering any person involved in the litigation

not to disclose an alleged trade secret without prior court

approval.

6. STATUTE OF LIMITATIONS.

An action for misappropriation must be brought within three years

after the misappropriation is discovered or by the exercise of

reasonable diligence should have been discovered. For the

purposes of this section, a continuing misappropriation

constitutes a single claim.

7. EFFECT ON OTHER LAW.

(a) Except as provided in subsection (b), this [act] displaces

conflicting tort, restitutionary, and other law of this state

providing civil remedies for misappropriation of a trade secret.

(b) this 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; or

(3) criminal remedies, whether or not based upon

misappropriation of a trade secret.

8. UNIFORMITY OF APPLICATION AND CONSTRUCTION.

This act shall be applied and construed to effectuate its

general purpose to make uniform the law with respect to the

subject of this act among states enacting it.

9.SHORT TITLE.

This act may be cited as the Uniform Trade Secrets Act.

10. SEVERABILITY.

If any provisions of this act or its application to any

person or circumstance is held invalid, the invalidity does not

affect other provisions or applications of the act which can be

given without the invalid provision or application, and to this

end the provisions of this act are severable.

11. TIME OF TAKING EFFECT.

This act takes effect on __________, and does not apply to

misappropriation occurring prior to the effective date. With

respect to continuing misappropriation that began prior to the

effective date, the act also does not apply to the continuing

misappropriation that occurs after the effective date.

12. REPEAL.

The following acts and parts of acts are repealed

(1)

(2)

(3)

LIST OF STATES ADOPTING:

ALABAMA

ALASKA

ARIZONA

ARKANSAS

CALIFORNIA

COLORADO

CONNECTICUT

DELAWARE

DISTRICT OF COLUMBIA

FLORIDA

HAWAII

IDAHO

ILLINOIS

INDIANA

IOWA

KANSAS

KENTUCKY

LOUISIANA

MAINE

MARYLAND

MINNESOTA

MISSISSIPPI

MONTANA

NEBRASKA

NEVADA

NEW HAMPSHIRE

NEW MEXICO

NORTH DAKOTA

OKLAHOMA

OREGON

RHODE ISLAND

SOUTH DAKOTA

UTAH

VIRGINIA

WASHINGTON

WEST VIRGINIA

WISCONSIN