What does trade secret law protect in Utah?
While patents, trademarks, and copyrights often receive the bulk of attention in intellectual property law, trade secrets are important and long-lasting intellectual property assets. Both patents and copyrights have limited terms, while trademarks and trade secrets can potentially last indefinitely.
What is a Trade Secret?
A trade secret, as defined by law in most states, is information, including a formula, pattern, compilation, program, device, method, technique, or process that derives economic value from not being known and not being readily ascertainable by proper means. To qualify for trade secret protection, in most cases a trade secret must be the subject of reasonable efforts to maintain its secrecy. Loss of trade secrets can significantly impact a company’s advantage in the market and requires immediate action to prevent further harm from occurring. Fortunately, Utah trade secret law protects those who have been injured by trade secret misappropriation.
Utah Protection of Trade Secrets
Utah, like most others in the United States, has adopted the Uniform Trade Secrets Act (UTSA), imposing civil liability on both those who have improperly disclosed or acquired others’ trade secrets. Utah Courts have held that certain information may be protectable as a trade secret. Whether information qualifies as a trade secret is highly contextual, but here are some examples of information that courts held qualified as a trade secret include:
- An accounts receivable program used in business and kept secret
- Unique algorithms and computer code
- Customer lists
- Publicly known technologies and concepts that:
- Are assembled and combined in a unique way;
- Have independent value; and
- Have been protected by reasonable efforts to maintain their secrecy.
Some examples of information that courts held did NOT qualify as a trade secret include:
- Contractor’s labor and equipment pricing information
- Company’s method of obtaining FDA approval and registering a medical device
- Marketing plan generally known to others within the industry
- Customer list where the names of customers are publicly available.
A note about customer lists, customer lists have received trade secret protection in circumstances where the identities of the customers are not known in the trade and are discoverable only by extraordinary efforts. The Uniform Trade Secrets Act does not protect your trade secret if the competition derives the information independently, reverse engineers it, licenses it, or otherwise properly obtains it. Utah Intellectual property attorneys, like those at TraskBritt, can help you figure out if your information is considered a trade secret.
How Does Trade Secret Theft Occur?
In many cases, former employees were the culprits when it comes to trade secret theft. One way to help prevent this type of abuse is to use and enforce non-compete, confidentiality, and nondisclosure agreements (NDAs) to set expectations as to what is a trade secret and as to behavior. Misappropriation of trade secrets includes disclosure, use, or acquisition of a trade secret by improper means. Improper means can include bribery, theft, misrepresentation, espionage by electronic or other means, and breach of a duty to maintain secrecy.
UTSA Provides Remedies for Misappropriation of a Trade Secret
If your trade secret has been illegally disclosed or acquired by a competitor, valuable legal remedies are available. These remedies include injunctive relief, reasonable royalties, monetary damages, attorney’s fees, exemplary damages, and affirmative acts. Generally, to obtain any type of injunctive relief, or a court order to stop misappropriating a trade secret, you must show irreparable harm. The Utah Supreme Court has ruled that irreparable harm is presumed in a case of trade secret misappropriation. See InnoSys v. Mercer, 2015 UT 80 (August 28, 2015). Utah trade secret law lays out many of the requirements to obtain the remedies discussed above, including a showing actual loss, bad faith, or willful and malicious misappropriation.
Efforts to Maintain Secrecy for Your Company
When dealing with a stolen trade secret, courts will examine your company’s efforts to preserve the secrecy of the valuable information. Therefore, not only to prevent the theft of valuable trade secrets, but to show courts that reasonable measures were taken to preserve trade secrets, at least the following steps should be taken:
- Authorize access to and use of information only through a license agreement
- Have procedures in place to house all employee agreements and documents in a safe place
- When employment ends, take steps to ensure all company property has been returned
- Ensure compliance of non-compete in specific geographic location
- Invest in training and development of employees to increase enforceability of NDAs
- Mark proprietary and confidential information
- Inform customers of the secret nature of the information
- Keep the information unavailable to the industry as a whole
If you believe a trade secret that you own has been misappropriated, or if you have been accused of misappropriating a trade secret, contact the skilled attorneys at TraskBritt. The law firm has extensive experience representing clients in obtaining emergency injunctive relief, providing effective legal counsel, and helping clients analyze trade secret misappropriation and breach of contract. You can trust the Utah intellectual property attorneys at TraskBritt with your trade secrets.