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New Jersey Adopts Version of the Uniform Trade Secrets Act

Posted on January 24th, 2012 | Author: Robert Mahoney

On January 9, New Jersey joined 46 other states in adopting its version of the Uniform Trade Secrets Act. Previously, businesses in New Jersey had to rely on common law remedies to protect their trade secrets from misappropriation.

The Act defines a “trade secret” as “information, held by one or more people, without regard to form, including a formula, pattern, business data compilation, program, device, method, technique, design, diagram, drawing, invention, plan, procedure, prototype or process that (1) 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 (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

A business may bring a civil action for misappropriation of a trade secret if the other party obtained the trade secret through “improper means” which includes theft, misrepresentation, breach of a duty to maintain the secrecy of the material and espionage.  Obtaining a trade secret of another through “proper means” (discovery by independent invention or reverse engineering, observation of information in the public domain or published literature) is a complete defense to a claim under the Act.

The Act authorizes courts to enter an injunction to prevent actual and threatened misappropriation; award actual damages for the harm suffered by the owner of the trade secret and for the unjust enrichment of the party who misappropriated the secret; and award punitive damages and attorney’s fees in cases of willful and malicious misappropriation.