What You Need to Know About US Law: Massachusetts and New York Trade Secrets Not Governed by Uniform Trade Secret Act

by Pierce Atwood LLP

The article below is the second in a series regarding "What You Need to Know About U.S. Law." Attorneys from a variety of practice groups at Pierce Atwood will author similar articles in the coming months to educate our overseas colleagues on U.S. law.

Trade secrets are a well-established if often poorly understood concept. Massachusetts and New York further complicate the analysis as neither has adopted the Uniform Trade Secret Act which has been adopted in 47 other states.[1] New York trade secret law is a pastiche of judicial decisions delineating a common law body of governing jurisprudence. Massachusetts has adopted its own unique set of laws that has been explained and expanded upon by judicial decisions. 

A General Discussion of Trade Secrets

In the information/technology economy, the data, strategies, expertise, customer information, and business opportunities harvested from the resources sowed in research and development, marketing, and employee training are the key assets a business must protect to ensure its success today and in the future. Very often, these intangible assets will be protected as trade secrets.

Unlike trademarks, copyrights, and patents, there are no filings or disclosures to be made with a government office and no certificate defining the metes and bounds of an enterprise’s trade secrets. In addition, unlike trademarks, copyrights and patents, which are delineated and governed in whole or in part by federal law, trade secret protection is governed by state law. A trade secret is the most ethereal of the four types of intellectual property. A trade secret, unlike a patent, trademark, or copyright, can be irrevocably lost simply by failing to maintain its secrecy. Trade secret protection is also shallow in that a party can seek redress, in most cases, only for either the improper acquisition or an unlawful use or disclosure of the trade secret. Indeed, a party acquiring a trade secret without an unlawful act by a third party and without a contractual prohibition on disclosure or use of the trade secret can make unfettered use or disclosure of that trade secret.  In addition, a third party may later independently develop or discover the trade secret and an earlier party possessing that trade secret will have no legal redress against that third party.


The Massachusetts Trade Secret Protection Act prohibits the unlawful misappropriation of another party’s trade secrets:

“whoever embezzles, steals or unlawfully takes, carries away, conceals or copies or by fraud or by deception obtains, from any person or corporation, with intent to convert to his own use, any trade secret… shall be liable in tort to such person or corporation for all damages arising therefrom.”

Mass Gen. Laws ch. 93 §42. A trade secret includes “anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences, or records a secret scientific, technical, merchandising production or management information, design process, procedure, formula invention or improvement.”  Mass Gen. Laws ch. 266, §30.         

In Massachusetts, the individual who misappropriated a third-party’s trade secrets on behalf of or for the benefit of their business or employer can be held personally liable for their unlawful acts. In addition, a competing business can be held liable for the receipt of a competitor’s trade secrets if the party disclosing the trade secrets had a duty or obligation not to disclose the trade secrets and the recipient (i) knew or even just had reason to know that the materials were the competitor’s trade secrets and (ii) knew or had reason to know that the disclosing party was under a legal obligation not to disclose the trade secrets.

New York

New York courts have adopted the Restatement of Torts’ definition of “trade secrets” as “any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.”  To state a claim for misappropriation of trade secrets under New York law, the plaintiff must allege: “(1) that it possessed a trade secret, and (2) that the defendants used that trade secret in breach of an agreement, confidential relationship or duty, or as a result of discovery by improper means.”

Under either Massachusetts or New York law, the key factual issues are that the information must actually be a secret, the measures taken by the business to guard the secrecy of the information, and the ease or difficulty with which the information could be independently acquired or duplicated by third parties.

The Inevitable Disclosure Doctrine

The inevitable disclosure doctrine arises when an employee not subject to a non-compete agreement leaves his former employer for a competitor. The former employer argues that the employee will inevitably disclose the former employer’s trade secrets or confidential information in the course of working for the competitor and, therefore, should be enjoined from working for the competitor.

Massachusetts has not adopted the inevitable disclosure doctrine. Absent an enforceable non-compete agreement, courts in Massachusetts have repeatedly denied requests for an injunction to prevent a former employee from taking a job with a competitor based only on the alleged inevitable disclosure of trade secrets.

Under very limited circumstances, New York has applied the inevitable disclosure doctrine. 

The Risk of Litigating Trade Secret Misappropriation

Both Massachusetts and New York require the plaintiff bringing a trade secret misappropriation action to disclose the allegedly misappropriated trade secrets with specificity.  In that, generally, to disclose a trade secret is to extinguish its protection as a trade secret and, therefore, this requirement could render litigation brought to protect a trade secret pyrrhic at best. However, steps can be taken to avoid this threat to trade secret protection.

Unlike patents, trademarks, and copyrights, there is no absolute right (i.e. Federal Subject Matter Jurisdiction) to bring a claim for trade secret misappropriation in federal court. Instead, absent diversity jurisdiction, a trade secret misappropriation action must be brought in state court. In both state and federal courts, the rules governing discovery and procedure provide for some additional protections to prevent the disclosure to third parties of the trade secrets at issue in the litigation. These protections include sealing the parties’ court filings or portions of the filings from public disclosure and delineating a process limiting the distribution of testimony or documents, even from parties to the litigation in certain instances. However, anytime you disclose information in what is presumed to be a public forum, such as court proceedings, there is a risk of that information leaking to the public. Moreover, although one party may seek to prevent or limit the disclosure of the trade secrets at issue, the other party may oppose those efforts for its own strategic purposes all of which places the trade secrets at risk depending on the court’s eventual rulings.

Damages and Injunctive Relief

Under both New York and Massachusetts law, the plaintiff in a trade secret action can seek both preliminary and permanent injunctive relief. The injunctive relief can take the form of an order prohibiting the defendant from taking, receiving, using, assigning, or otherwise transferring the trade secret. In addition, a plaintiff can be awarded its lost profits or the profits of the defendant that were unjustly gained by the unlawful use of the misappropriated trade secret.

In Massachusetts, under Mass. Gen. Laws. ch. 93A, the court also has the discretion to double the damages award to the plaintiff and, in some circumstances, triple the damages award.  Under the same statute, the court may also award the plaintiff its attorneys’ fees in the action. New York does not have a similar statute.


[1] Texas has also failed to adopt the Uniform Trade Secret Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pierce Atwood LLP | Attorney Advertising

Written by:

Pierce Atwood LLP

Pierce Atwood LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.