This Day In Trade Secrets: Uniform Trade Secrets Act Approved 34 Years Ago Today

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On this day in 1979, the National Conference of Commissioners on Uniform State Laws approved the Uniform Trade Secrets Act (UTSA) and recommended it for enactment in all states.  The act was amended once, nearly six years to the day later, on August 8, 1985.

The law’s Prefatory Note gives some context for how it came about:

“Notwithstanding the commercial importance of state trade secret law to interstate business, this law has not developed satisfactorily. In the first place, its development is uneven. Although there typically are a substantial number of reported decisions in states that are commercial centers, this is not the case in less populous and more agricultural jurisdictions. Secondly, even in states in which there has been significant litigation, there is undue uncertainty concerning the parameters of trade secret protection, and the appropriate remedies for misappropriation of a trade secret….

The Uniform Act codifies the basic principles of common law trade secret protection, preserving its essential distinctions from patent law….

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… The contribution of the Uniform Act is substitution of unitary definitions of trade secret and trade secret misappropriation, and a single statute of limitations for the various property, quasi-contractual, and violation of fiduciary relationship theories of noncontractual liability utilized at common law. The Uniform Act also codifies the results of the better reasoned cases concerning the remedies for trade secret misappropriation.”

The Prefatory Note details the history of the uniform act.  The American Bar Association’s Patent Section originally thought of the idea of a UTSA in 1966, and it took 13 years for it to take shape and finally get approved in 1979.

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Today 47 (or arguably 48) states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have enacted some version of the UTSA.  Although there are differences among various states’ versions of the law, this has resulted in some semblance of uniformity in trade secret law across the nation.  The two most recent states to adopt the act were New Jersey in 2012, and Texas earlier this year, with the Texas UTSA set to go into effect in just a few weeks on September 1, 2013.  The Uniform Law Commission’s Enactment Status Map doesn’t list North Carolina as a state that’s adopted the UTSA but its law is very similar and seems to borrow heavily from the act, so we’re counting it.

At this point New York and Massachusetts are the only holdouts, and there’s currently a Massachusetts UTSA bill pending in the legislature.

You can find a comprehensive list of all the states’ trade secret laws on our Trade Secrets Laws page.