The Uniform Trade Secrets Act (UTSA), published by the Uniform Law Commission (ULC) in 1979 and amended in 1985, is a Uniform Act promulgated for adoption by states in the United States. One goal of the UTSA is to make the state laws governing trade secrets uniform, which is especially important for companies that operate in more than one state. Historically, the law governing misappropriation of trade secrets developed separately in each state.
Of course, achieving the goal of uniformity depends upon the number of states that choose to adopt it. , the UTSA has been enacted by 48 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. As with other Uniform Acts, some states have modified language in their version of the statute.
Motivation
A prefatory note to the UTSA states some original motivations for the act:
The UTSA made note of the commercial value and competitive advantages inherent in trade secrets. Unlike patent protection, which was addressed at the federal level, trade secret misappropriation was addressed at the state level.
In the United States there existed a prevalence of interstate commercial transactions that extended beyond the jurisdiction of individual state legislation. For example, goods may have been manufactured in State A, warehoused in State B, sold from State C, and delivered in State D.
As a result, the UTSA sought to alleviate the uneven development and "uncertainty concerning the parameters of trade secret protection" by recommending a uniform trade secret law and, at the same time, allowing the states the flexibility to meet local circumstances by modifying the text as enacted in each state.
In addition to providing some recourse for any uncertainty associated with a patent, the UTSA also serves to codify the common law remedies that have emerged in many states. These remedies are based on legal precedent set by previous cases, and therefore allow for greater uncertainty, particularly in less industrial states where there have been fewer trade secret cases.
The UTSA notes that any confusion caused by having strictly common law remedies to trade secret misappropriation was exacerbated by omitting trade secret rules from the second edition of the Restatement of Torts.
Overview
The UTSA contained a prefatory note followed by 12 sections of proposed law. Each section was followed by a "comments" section that provided clarifications and examples as to the intent of the law. Section 1 presented definitions of key terms as they are used throughout the act. Sections 2–4 provided remedies for potential wrongs committed in violation of the act, including injunctive relief, damages and attorney's fees. Sections 5–12 made additional provisions related to the implementation of the law, and the relationship to other laws.
Key definitions
The UTSA provided several definitions of terms as they are used throughout the act. Some of these definitions are replicated here for the benefit of the reader.
Although not included in the definition itself, the original text of the UTSA provided clarification regarding the definition of proper and improper means. The comments refined the definition by listing several proper means of discovery, including discovery by independent invention, reverse engineering, licensing arrangement, and published literature. The comments also clarified that improper means included actions that were, "improper under the circumstances; e.g., an airplane overflight used as aerial reconnaissance to determine the competitor's plant layout during construction of the plant".
The UTSA noted that the types of accidents or mistakes that would lead to use of a learned trade secret being misappropriated did not include actions or mistakes that "constitute a failure of efforts that are reasonable under circumstances to maintain its [the trade secret's] secrecy".