Trade Secret Basics FAQ
What every business owner should know about trade secret law.
What is a trade secret?
What types of information can trade secrets protect?
What rights does the owner of a trade secret have?
How can a business protect its trade secrets?
How can a business enforce its rights if someone steals or improperly discloses confidential information?
» Is stealing trade secrets a crime?
Is stealing trade secrets a crime?
Intentional theft of trade secrets can constitute a crime under both federal and state laws. The most significant federal law dealing with trade secret theft is the Economic Espionage Act of 1996 (EEA) (18 U.S.C., Sections 1831 to 1839). The EEA gives the U.S. Attorney General sweeping powers to prosecute any person or company involved in trade secret misappropriation and punishes intentional stealing, copying or receiving of trade secrets. Penalties for violations are severe: Individuals may be fined up to $500,000 and corporations up to $5 million. A violator may also be sent to prison for up to ten years. All property used and proceeds derived from the theft can be seized and sold by the government.
The EEA applies not only to thefts that occur within the United States, but also to thefts outside the U.S. if the thief is a U.S. citizen or corporation, or if any act in furtherance of the offense occurred in the U.S. If the theft is performed on behalf of a foreign government or agent, the corporate fines can double and jail time may increase to 15 years.
Several states have also enacted laws making trade secret infringement a crime. For example, in California it is a crime to acquire, disclose or use trade secrets without authorization. Violators may be fined up to $5,000, sentenced to up to one year in jail, or both. (Cal. Penal Code Section 499c.)
| STATES THAT HAVE ADOPTED SOME VERSION OF THE UNIFORM TRADE SECRETS ACT |
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State
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Statute
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Alabama*
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Ala. Code. §§ 8-27-1 et seq.
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Alaska
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Alaska Stat. §§ 45.50.910 et seq.
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Arkansas
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Ark. Stat. Ann. §§ 4-75-601 et seq.
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California
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Cal. Civ. Code §§ 3426 et seq.
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Colorado
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Col. Rev. Stat §§ 7-74-101
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Connecticut
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Conn. Genl. Stat. §§ 35-50 et seq.
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Delaware
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Del. Code Ann. Title 6 §§ 2001 et seq.
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District of Columbia
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D.C. Code Ann. §§ 36-401 et seq.
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Florida
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Fla. Stat Ann. §§ 688.001 et seq.
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Hawaii
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Haw. Rev. Stat. §§ 482B-1 et seq.
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Idaho
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Idaho Code §§ 48-801 et seq.
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Illinois
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Ill. Ann. Stat. ch. 140 §§ 351-59
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Indiana
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Ind. Code. Ann. §§ 24-3-1
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Kansas
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Kan. Stat. Ann. §§ 60-3320 et seq.
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Louisiana
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La. Rev. Stat. Ann. §§ 51:1431 et seq.
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Maine
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M.R.S.A. Title 10 §§ 1541 et seq.
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Maryland
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Md. Com. L. Code §§ 11-1201 et seq.
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Minnesota
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Minn. Stat Ann. §§ 325C.01 et seq.
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Montana
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Mont. Code Ann. §§ 30-14-401 et seq.
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Nebraska
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Neb. Rev. Stat. §§ 87-501 et seq.
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Nevada
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Nev. Rev. Stat. §§ 600A.010 et seq.
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New Mexico
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N.M. Stat. Ann.§§ 57-3A-1 et seq.
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North Carolina*
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N.C. Gen. Stat. §§ 66-152 et seq.
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North Dakota
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N.D. Cent. Code §§ 47-25.1-01 et seq.
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Oklahoma
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Okl. Genl. Laws §§ 6-41-1
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Oregon
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Or. Rev. Stat. §§ 646.461 et seq.
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Rhode Island
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R.I. Gen. Laws §§ 6-41-1 et seq.
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South Dakota
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S.D. Cod. Laws §§ 37-29-1 et seq.
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Utah
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Utah Code Ann. §§ 13-24-1 et seq.
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Virginia
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Va. Code. Ann. §§ 59.1-336 et seq.
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Washington
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Wash. Rev. Code. Ann. §§ 19.108.010 et seq.
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West Virginia
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W. VA. Code. §§ 47-22-1 et seq.
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Wisconsin
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Wis. Stat. Ann. § 134.90
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* Although they have adopted portions of the UTSA, Alabama and North Carolina are considered to have taken "major departures" from the UTSA because Alabama narrows trade secret protection while North Carolina broadens it.
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| More Information About Trade Secrets |
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For a more detailed explanation of trade secrets and nondisclosure agreements, as well as the full text of the Uniform Trade Secrets Act, see www.ndasforfree.com.
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