Uniform Trade Secrets Act : Comparison to
Illinois Trade Secrets Act
(Drafted by the National Conference of Commissioners
on Uniform State Laws, as amended 1985)
R. Mark Halligan, Esq.
The Uniform Trade Secrets Act ("UTSA") is
model legislation drafted by the National Conference of
Commissioners on Uniform State Laws. In order to understand the
history and legal analysis reflected in the various provisions of
the Act, the complete hard copy of the Uniform Trade Secrets Act
with Commissioner's Comments on the various sections of the UTSA
can be ordered from the National Conference of Commissioners on
Uniforms State Laws, 676 North St. Clair Street, Suite 1700
Chicago, Il 60611.
Forty (42
states) have enacted various statutes modeled
after the USTA and therefore the UTSA should not be relied upon
without consulting with intellectual property counsel. The
changes to the UTSA enacted by Illinois in the Illinois Trade
Secrets Act ("ITSA") are highlighted below in brackets
to illustrate this point.
UTSA Comparison To Illinois Trade Secrets Act
("ITSA")
§1. Definitions
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
confidential relationship or other duty to maintain secrecy] of a
breach of duty to maintain secrecy, or espionage through
electronic or other means.
(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 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 ad 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, governmental subdivision or agency, or any
other legal or commercial entity [or any other for-profit or
not-for-profit legal entity].
(4) "Trade secret" means information, including
[but not limited to] [technical or non-technical data]a formula,
pattern, compilation, program device, method, technique,
[drawing]or process,[financial data, or list of actual or
potential customers] that: (i) [ is sufficiently secret
to]derive[s] [independent--strike out] economic value, actual or
potential, from no being generally known to, [and not being
readily ascertainable by proper means--strike out] , 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.
§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 [provided that
the] the injunction may be continued for an additional reasonable
period of time [ in appropriate circumstances for reasons
including but not limited to an elimination] in order to
eliminate commercial advantage that otherwise would be derived
from the misappropriation [deterrence of willful and malicious
misappropriation, or where the trade secret ceases to exist due
to the fault of the enjoined party or others by improper means].
(b) [--strike out].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 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. [If the court determines that it would be
unreasonable to prohibit future use due to an overriding public
interest, 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].
(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
change 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 misappropriation.
--Strike out] Damages can include both the actual loss caused by
misappropriation and the unjust enrichment caused by
misappropriation that is not taken into account in computing
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--strike out]. [If neither damages nor unjust enrichment
caused by the misappropriation are proved by a preponderance of
the evidence, the court may award damages caused by
misappropriation measured in terms of 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 the 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 3 years
[within 5 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;
[provided however, that a contractual or other duty to maintain
secrecy or limit use of a trade secret shall not be deemed to be
void or unenforceable solely for lack of durational or
geographical limitation on the duty] (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. [(4) the definition of a trade secret
contained in any other Act of this State.]
[§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.--strike out].
[§9. Short Title
This Act may be cited as the Uniform Trade Secrets
Act.--strike out].
[§10. Severability
If any provision of this Act or its application to any person
or circumstances is held invalid, the invalidity does not affect
other provisions or applications of the Act which can be given
effect without the invalid provision or application, and to this
end the provisions of this Act are severable.--strike out].
§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 a 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.--strike
out].
[§12. Repeal
The following Acts and parts of Acts are
repealed*****:--strike out].
