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Criterion for Trade Secret Protection (TSP) Under the Uniform Trade Secret Act (UTSA)

December 28, 2011 | Comments: 0 | Views: 120

The UTSA includes a series of definitions which spell out the TSP available to the states that have adopted the Act.

The Act includes improper means to obtain information including theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.

The act defines misappropriation to mean (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 and that knowledge of it had been acquired by accident or mistake.

In order to receive TSP, there must be information that falls into one of the statutory types of information. The information must relate to a formula, pattern, compilation, program device, method, technique or process., It would appear that physical devices are not covered by the statue, per se, but information about the physical device would be covered by the trade secret statue.

By person, the act has provided a very broad definition to include all types of entities which may include natural persons, businesses, governments and the like.

The statue requires that the information have economic value. There does not appear to be a requirement that the economic value be derived to the bona fide holder of the information. Furthermore, the economic value does not need to be a present economic value, but the economic value may be a future economic value. This would arguably eliminate the requirement for economic value in the real world because it would be difficult to imagine that some argument for future economic value could not be made.

The statue does require secrecy for TSP by requiring efforts that are reasonable under the circumstances to maintain its secrecy. However, the UTSA seems to introduce flexibility into the secrecy requirement. Since it is conceivable that circumstances could change, and thus efforts which are reasonable based on the circumstances could change to accommodate the changing circumstances.

There is a requirement that the information not be readily ascertainable by proper means. The statue does not define proper means but does define improper means which may be theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.

The statue clearly recognizes that information obtained through electronic means is a violation of the TSP. The statue appears to recognize all forms of espionage as a violation of the TSP.

Employees have a duty to maintain the secrecy of trade secrets. Furthermore, others who induce a breach to maintain the secrecy of trade secrets are liable for a violation of the TSP. This would appear to eliminate the defense of others who did not actually breach the duty to maintain the secrecy of the trade secrets.

Wilson Daniel Swayze, Jr.

Source: EzineArticles
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