User:Brad.miller.87/UTSA: Difference between revisions

The following is a list of improvements I propose to make to the current Uniform Trade Secrets Act article:

• DONE Add the Intellectual Property navbar as seen at Copyright.
• Improve quotations from the actual UTSA, add references, and improve formatting as seen at Fair use.
  • Add links to the various specific state statues which correspond to the UTSA (e.g. Nevada, Delware, Virginia, Indiana, Connecticut, West Virginia, Minnesota, Florida, Wyoming, Iowa).
• Amend the following articles to reference the Uniform Trade Secrets Act
  • Rivendell Forest Prods. v. Georgia-Pacific Corp.
  • Comprehensive Techs. Int'l, Inc. v. Software Artisans, Inc.

Suggested Outline for Article

• Intro paragraph
  • Trade Secret
  • UTSA
  • Uniform Law Commission
  • State adoption overview

• Motivations for the UTSA
  • Cite arguments made by the act

• Outline of the act and key definitions
  • Paragraph overview of different sections of act
  • Definitions
    • Improper means
    • Misappropriate
    • Trade Secret
  • Overview of remedies
    • Injunctive relief
    • Damages
    • Attorney's fees
  • Other provisions of the UTSA
    • Preservation of secrecy
    • Statute of limitations
    • Effect on other law

• Adoption by states
  • List states which have not adopted
  • List states which have proposed adoption
  • Provide pointers to the act in the code of individual states

• Cases which have used the act
  • Provide pointers to at least 5 other articles on Wikipedia
    • These articles should in turn point to this page
  • Provide inline summary of several cases
  • Provide listing of other cases which allege violations of this act and pointers to associated opinions

• References

• External Links

• See also

Listing of trade secret cases

• Rivendell Forest Prods. v. Georgia-Pacific Corp. (D. Colo. 1993, 10th Cir. 1994) (237 syllabus, SAIL)
• TOO-OLD Data General Corp. v. Digital Computer Controls, Inc. (Del. Ch. 1971) (237 syllabus, SAIL)
• !!!MATCH!!! Comprehensive Techs. Int'l, Inc. v. Software Artisans, Inc. (4th Cir. 1993) (237 syllabus, SAIL)
• NO-DIRECT-REFERENCE Asset Marketing Systems, Inc. v. Gagnon (9th Cir. 2008) (237 syllabus, internet only)
• NON-COMPETE Microsoft Corp. v. Lee (Wash. Sup. Ct. Sep. 13, 2005) (237 syllabus, internet only)
• NON-U.T.S.A.-STATE IBM v. Papermaster (S.D.N.Y. Nov. 21, 2008) (237 syllabus, internet only)
• Ajaxo Inc. v. E*Trade Financial Corp. (Cal. Ct. App.) (2011 Wiki Project)
• Hewlett-Packard Co. v. Hurd (cal. sp. court) (trade secret resources)
• Silvaco Data Systems v. Intel Corp., 184 Cal. App. 4th 210 (Cal. Ct. App. 2010) (trade secret resources)
• R.C. Olmstead, Inc. v. CU Interface, LLC, (6th Cir. May 19, 2010) (trade secret resources)
• Justmed, Inc. v. Byce, (9th Cir. Apr. 5, 2010) (trade secret resources)
• Ansys, Inc. v. Computational Dynamics North America, Ltd., (1st Cir. Feb. 12, 2010) (trade secret resources)
• Decision Insights, Inc. v. Sentia Group, Inc., (4th Cir. Feb. 12, 2009) (trade secret resources)
• USA v. Pani (D. Mass. Nov. 5, 2008) (indictment) (trade secret resources)
• Cypress Semiconductor Corp. v. Superior Court, (Cal. Ct. App. 2008) (trade secret resources)
• NCR v. Warner, (S.D. Ohio Apr. 24, 2008) (trade secret resources)
• Othentec Ltd. v. Phelan, (4th Cir. 2008) (trade secret resources)
• S. Nuclear Operating Co., Inc. v. Elec. Data Sys. Corp., (11th Cir. Apr. 14, 2008) (trade secret resources)
• Storage Tech. Corp. v. Custom Hardware Eng'g (Fed. Cir. 2005) (trade secret resources)
• DVD Copy Control Association, Inc. v. Bunner (116 Cal. App. 4th 241) (Wikipedia existing inlinks)

Actual Article

The Uniform Trade Secrets Act (UTSA) is a model law drafted by the National Conference of Commissioners on Uniform State Laws to better define rights and remedies of common law trade secret. It has been adopted by 45 states and by the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Massachusetts, New Jersey, New York, North Carolina and Texas have not adopted the UTSA. Some of these states continue to apply common law to trade secrets, and some have adopted separate state statutes. In 2011, the UTSA was introduced in the state legislatures of Massachusetts (H.B. 23) and New Jersey (A.B. 921). The Massachusetts version of the UTSA has been introduced in each legislative session for over 15 years without passage.

Overview of the UTSA

The U.T.S.A., as published by the Uniform Law Commission (ULC) 1979 and amended in 1985, contains a prefatory note followed by 12 sections of proposed law. Each section is followed by a "comments" section in which the ULC provides clarifications and deeper insights as to the intended interpretation of the law. Section 1 presents definitions of key terms as they are used throughout the act. Sections 2-4 provide remedies for potential wrongs committed in violation of the act, including injunctive relief, damages and attorney's fees. Sections 5-12 make additional provisions related to the implementation of the law, and the relationship of this law to other laws.

Key Definitions

The U.T.S.A. provides several definitions of terms as they are used throughout the act. Some of these definitions are replicated here for the benefit of the reader.

U.T.S.A. § 1.1

"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.

Although not included in the definition itself, the original text of the U.T.S.A. provides a clarifying comment regarding the definition of improper means. The comment refines the definition, by listing several methods which are proper means of discovery, including, discovery by independent invention, reverse engineering, licensing arrangement and published literature. The comment also clarifies that improper means includes those which are "improper under the circumstances; e.g. an airplane overflight used as aerial reconnaissance to determine the competitor's plant layout during construction of the plant."

U.T.S.A. § 1.2

"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.

Note that the U.T.S.A. does add comment clarifying that the types of accidents of mistakes which would lead to use of a learned trade secret being misappropriation do not include those actions or mistakes which "constitute a failure of efforts that are reasonable under circumstances to maintain its [the trade secret's] secrecy."

U.T.S.A. § 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 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.

The original text of the U.T.S.A. also provides refinement through comments to the definition of a trade secret itself. The comments provide that:

• Multiple parties may hold rights to the same trade secret, as they may all individually derive value from it.
• A trade secret ceases to exist when it is common knowledge within the community in which it is profitable. This means that the secret does not need to be known by the general public, but only throughout the industry which stands to profit from the secret.
• A party which reverse engineers a trade secret may also obtain trade secret protection for their knowledge, provided the reverse engineering process is non-trivial.
• Knowledge preventing loss of funds, such as that a particular idea does not work, is valuable and as such qualifies for trade secret protection.

Regarding reasonable efforts to maintain secrecy, the ULC provides clarification that actions such as restricting access to a "need to know basis" and informing employees that the information is secret meet the criteria for reasonable efforts. The ULC explicitly states that procedures to protect against "flagrant industrial espionage" are not necessary.

Remedies

The U.T.S.A. provides for several potential remedies for wrongs committed under the act, including injunctive relief, damages and attorney's fees.

Injunctive Relief

Section 2 of the U.T.S.A. provides for injunctive relief from trade secret misappropriation. Section 2(a) stipulates that "Actual or threatened misappropriation may be enjoined." Note however, that the length of the injunction is limited to the length of time which the trade secret exists (i.e. remains unknown to some party which could profit from knowing the secret) plus sufficient time to eliminate any competitive advantage which the misappropriator could have obtained by misappropriating the trade secret.

For example, consider a situation in which A, B and C are the sole operators in an industry. Assume A develops a trade secret, B misappropriates the trade secret from A, and C independently reverse engineers the trade secret from A's product at some point. An injunction against B's use of the trade secret can last 2x the amount of time from when B misappropriated the secret up until C reverse engineers the secret. The period of time lasting from B's misappropriation until C's reverse engineering serves the purpose of enjoining B as long as the trade secret exists; recall that a trade secret no longer exists once all members of an industry (in this case A, B and C) are aware of its existence. The injunction may be extended by this same period of time beyond C's reverse engineering in order to prevent B from obtaining unfair advantage as a result of misappropriating the secret. Under this arrangement, once B is released from the injunction and able to bring a product to market, C will have had an amount of time to design products equal to the amount of lead time which B unjustly obtained through misappropriation.

In addition to the possible enjoinment described in section 2(a), section 2(b) allows for the payment of royalties in place of an injunction under exception circumstances. As an example of such circumstances, the U.T.S.A. references a situation in which a misappropriated trade secret was used to build military technology for use during the Vietnam War. As an injunction may have prevented necessary equipment from reaching US armed forces, the judge ordered that the misappropriate pay an appropriate royalty to the trade secret owner rather than imposing an injunction.

Safe Harbors

The UTSA does not codify the defenses traditionally recognized in the common law trade secret, such as disclosure by the owner, reverse engineering, and independent development. However, the defenses are implicit in the requirement that a trade secret not be "readily ascertainable."

Other Provisions

The UTSA also permits courts to grant protective orders to ensure the secrecy of trade secret during discovery and to prevent disclosure by witnesses. In addition, the UTSA authorizes in camera hearings to take testimony.

External links

• "Trade Secrets Act". National Conference of Commissioners of Uniform State Laws. Retrieved 2011-08-02.
• Uniform Trade Secrets Act, as amended in 1985

See also

• Economic Espionage Act of 1996