As we have previously discussed on the blog, President Obama signed the Defend Trade Secrets Act (DTSA) into law on May 11, 2016. Fortunately, while the law has many new components that businesses need to consider, parts of the DTSA are derived from the Uniform Trade Secrets Act (UTSA). The UTSA has been adopted, in various forms, by 47 states to date. Therefore, there is a large body of state law that has developed on the UTSA that may be applicable to the DTSA. This latest blog entry in our series on the DTSA analyzes some of the differences and similarities between the DTSA and UTSA, specifically the acts’ “trade secrets” and “misappropriations” definitions and their statutes of limitations.
I. “Trade Secret” Definition
The UTSA and DTSA have similar but slightly different definitions of “trade secrets”:
UTSA Trade Secret Definition
§ 1(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(i) 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
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
DTSA Trade Secret Definition
18 U.S.C. § 1839(3) as amended by § 2(b)(1) of DTSA
(3) the term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—
(A) the owner thereof has taken reasonable measures to keep such information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information;