Chapter 625 - Uniform Trade Secrets Act

Sec. 35-51. Definitions. As used in this chapter, unless the context requires otherwise:

(a) “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means, including searching through trash.

(b) “Misappropriation” means: (1) 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 (2) 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, including but not limited to disclosures made under section 1-210, sections 31-40j to 31-40p, inclusive, or subsection (c) of section 12-62; 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.

(c) “Person” means a natural person, corporation, limited liability company, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.

(d) Notwithstanding the provisions of sections 1-210, 31-40j to 31-40p, inclusive, and subsection (c) of section 12-62, “trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list 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.

(P.A. 83-344, S. 2; P.A. 95-79, S. 134, 189; 95-283, S. 64, 68; P.A. 97-110.)

History: P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995; P.A. 95-283 made technical change to replace reference to Sec. 12-62(b) with Sec. 12-62(c), effective July 6, 1995; P.A. 97-110 amended Subsec. (a) by adding “including searching through trash”.

Defendant's knowledge of the trade secret is an element of misappropriation claim under Subsec. (b)(2)(B)(iii) and defendant cannot “use” the trade secret for purposes of the statute if defendant does not have knowledge of the trade secret itself. 349 C. 513.

Subsec. (d):

Plaintiffs met secrecy requirement of Subdiv. (2); trial court did not err in finding that plaintiff had a trade secret as defined therein. 251 C. 59. Not all components of a secret business plan are necessarily trade secrets; plaintiff corporation's plan to use open chest surgery products to generate cash in a declining market was an element of plaintiff's future business strategy and defendant's disclosure of plan constituted misappropriation of trade secret; employee seeking to purchase a publicly traded corporation is not competing with the shareholder owners of trade secret and does not seek to deprive them of right to profit from their investments. 282 C. 209.

There were insufficient facts that certain exhibits were trade secrets that should be sealed, and certain other exhibits contained information already in the public domain and should not have been sealed. 120 CA 837.

Sec. 35-52. Injunctive relief. (a) Actual or threatened misappropriation may be enjoined upon application to any court of competent jurisdiction. 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) If the court determines that it would be unreasonable to prohibit future use, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time the use could have been prohibited.

(P.A. 83-344, S. 3.)

Sec. 35-53. Damages. Punitive damages for wilful and malicious misappropriation. (a) In addition to or in lieu of injunctive relief, a complainant may recover damages for the actual loss caused by misappropriation. A complainant also may recover for the unjust enrichment caused by misappropriation that is not taken into account in computing damages for actual loss.

(b) In any action brought pursuant to subsection (a) of this section, if the court finds wilful and malicious misappropriation, the court may award punitive damages in an amount not exceeding twice any award made under subsection (a) and may award reasonable attorney's fees to the prevailing party.

(P.A. 83-344, S. 4.)

Subsec. (b):

Trial court's finding of willful and malicious misappropriation was supported by the record and trial court did not abuse its discretion in awarding punitive damages and attorneys' fees. 251 C. 59. Trial court did not abuse its discretion in awarding $40,000 in punitive damages, inasmuch as award did not exceed twice the amount of the award of compensatory damages. 267 C. 456. Since defendant's attempted takeover of plaintiff employer was not intended to injure the shareholder owners of a trade secret and did not constitute a malicious violation of Uniform Trade Secrets Act, plaintiff was not entitled to punitive damages and attorneys fees. 282 C. 209.

Sec. 35-54. Attorney's fees. If a claim of misappropriation is made in bad faith or a motion to terminate an injunction is made or resisted in bad faith, the court may award reasonable attorney's fees to the prevailing party.

(P.A. 83-344, S. 5.)

Cited. 204 C. 17.

Sec. 35-55. Protection of trade secrets by court. In an action under this chapter, 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.

(P.A. 83-344, S. 6.)

Sec. 35-56. Limitation of action for misappropriation. No action for misappropriation shall be brought but within three years from the date 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.

(P.A. 83-344, S. 7.)

Sec. 35-57. Provisions of chapter supersede conflicting law re civil liability. Limitation. (a) Unless otherwise agreed by the parties, the provisions of this chapter supersede any conflicting tort, restitutionary, or other law of this state pertaining to civil liability for misappropriation of a trade secret.

(b) This chapter does not affect: (1) Contractual or other civil liability or relief that is not based upon misappropriation of a trade secret; (2) criminal liability for misappropriation of a trade secret; or (3) the duty of any person or state or municipal agency to disclose information pursuant to section 1-210, sections 31-40j to 31-40p, inclusive, or subsection (c) of section 12-62, or wherever expressly provided by law.

(P.A. 83-344, S. 8; P.A. 95-283, S. 65, 68.)

History: P.A. 95-283 amended Subsec. (b) to make technical change replacing reference to Subsec. (b) of Sec. 12-62 with Subsec. (c) of Sec. 12-62, effective July 6, 1995.

CUTSA preempts noncontractual civil claims against a former employee based on the acquisition, disclosure, or use of confidential information that does not rise to the level of a trade secret; in the absence of evidence that alleged conspirator possessed actual or constructive knowledge of the trade secret, CUTSA, which specifies that only those who have such knowledge be held liable for misappropriation, preempts common law claims involving the theft of trade secrets that dispense with that requirement. 349 C. 513.

Sec. 35-58. Rules of construction. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

(P.A. 83-344, S. 9.)