This title may be cited as the Uniform Trade Secrets Act.
ReliefUniform Trade Secrets Act
Section § 3426
Section 3426 is simply stating the name of the law, which is the Uniform Trade Secrets Act. This law deals with the protection of trade secrets.
Uniform Trade Secrets Act trade secret protection intellectual property
Section § 3426.1
This law defines key terms related to the protection of trade secrets. "Improper means" involve actions like theft or bribery to get a trade secret, but not reverse engineering or independent creation. "Misappropriation" happens when someone improperly acquires or uses a trade secret without the owner's permission, knowing that it was improperly obtained or supposed to be secret. A "person" can be an individual or any type of legal entity, like a company or government agency. A "trade secret" is valuable information not known by the public that a business tries to keep secret, like a formula or method.
As used in this title, unless the context requires otherwise:
(a)CA Civil Law Code § 3426.1(a) “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. Reverse engineering or independent derivation alone shall not be considered improper means.
(b)CA Civil Law Code § 3426.1(b) “Misappropriation” means:
(1)CA Civil Law Code § 3426.1(b)(1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(2)CA Civil Law Code § 3426.1(b)(2) Disclosure or use of a trade secret of another without express or implied consent by a person who:
(A)CA Civil Law Code § 3426.1(b)(2)(A) Used improper means to acquire knowledge of the trade secret; or
(B)CA Civil Law Code § 3426.1(b)(2)(B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was:
(i)CA Civil Law Code § 3426.1(b)(2)(B)(i) Derived from or through a person who had utilized improper means to acquire it;
(ii)CA Civil Law Code § 3426.1(b)(2)(B)(ii) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(iii)CA Civil Law Code § 3426.1(b)(2)(B)(iii) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(C)CA Civil Law Code § 3426.1(b)(2)(C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
(c)CA Civil Law Code § 3426.1(c) “Person” means a natural person, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.
(d)CA Civil Law Code § 3426.1(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1)CA Civil Law Code § 3426.1(d)(1) Derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2)CA Civil Law Code § 3426.1(d)(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
trade secret improper means misappropriation
Section § 3426.2
If someone is misusing your trade secret or is about to misuse it, you can ask the court to stop them through an injunction. This order stops when the trade secret no longer exists, but it might last longer to prevent unfair advantages. If completely banning the use isn't fair, the court might allow it if the user pays a fair fee for a limited time. Sometimes, the court can order specific actions to protect the trade secret.
(a)CA Civil Law Code § 3426.2(a) Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.
(b)CA Civil Law Code § 3426.2(b) If the court determines that it would be unreasonable to prohibit future use, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time the use could have been prohibited.
(c)CA Civil Law Code § 3426.2(c) In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.
trade secret misappropriation injunction court order
Section § 3426.3
This law allows someone who has had their trade secret stolen (misappropriated) to recover financial damages. They can get compensated for the actual losses they suffered and any unjust benefits the thief gained. If these can't be easily calculated, the court may decide on a fair payment called a 'reasonable royalty.' Additionally, if the theft was done on purpose and maliciously, the court might award extra damages up to twice the amount of the initial award.
(a)CA Civil Law Code § 3426.3(a) A complainant may recover damages for the actual loss caused by misappropriation. A complainant also may recover for the unjust enrichment caused by misappropriation that is not taken into account in computing damages for actual loss.
(b)CA Civil Law Code § 3426.3(b) If neither damages nor unjust enrichment caused by misappropriation are provable, the court may order payment of a reasonable royalty for no longer than the period of time the use could have been prohibited.
(c)CA Civil Law Code § 3426.3(c) If willful and malicious misappropriation exists, the
court may award exemplary damages in an amount not exceeding twice any award made under subdivision (a) or (b).
trade secret theft misappropriation actual loss
Section § 3426.4
If someone makes a claim of stealing trade secrets with bad intentions, or if someone wrongly tries to start or stop a legal order related to this, the court can order them to pay for the other party's attorney fees and costs. These costs can include paying for expert witnesses needed for trial or arbitration.
If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable attorney’s fees and costs to the prevailing party. Recoverable costs hereunder shall include a reasonable sum to cover the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the prevailing
party.
misappropriation in bad faith attorney's fees willful misappropriation
Section § 3426.5
This law ensures that if a business or individual goes to court to protect a trade secret, the court will make efforts to keep that information private. The court could do things like hold private hearings, seal records, or issue orders to prevent anyone involved from sharing the secret without permission.
In an action under this title, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.
trade secret protection court secrecy protective orders
Section § 3426.6
If someone has taken or used something of yours wrongly (misappropriation), you have three years to file a lawsuit once you find out or should have found out through normal care. If the wrongful use keeps happening, it still counts as just one claim.
An action for misappropriation must be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.
misappropriation discovered reasonable diligence
Section § 3426.7
This section clarifies that the law does not replace existing laws about trade secret misappropriation or other laws that regulate trade secrets. It also states that contractual, civil, or criminal remedies remain unchanged, even if they involve trade secrets. Additionally, the law doesn't affect how government agencies disclose records under the California Public Records Act. Whether such a disclosure is a trade secret issue is determined by laws that existed before this section was established.
(a)CA Civil Law Code § 3426.7(a) Except as otherwise expressly provided, this title does not supersede any statute relating to misappropriation of a trade secret, or any statute otherwise regulating trade secrets.
(b)CA Civil Law Code § 3426.7(b) This title does not affect (1) contractual remedies, whether or not based upon misappropriation of a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, or (3) criminal remedies, whether or not based upon misappropriation of a trade secret.
(c)CA Civil Law Code § 3426.7(c) This title does not affect the disclosure of a record by a state or local agency under the California Public Records
Act (Division 10 (commencing with Section 7920.000) of Title 1 of the
Government Code). Any determination as to whether the disclosure of a record under the California Public Records Act constitutes a misappropriation of a trade secret and the rights and remedies with respect thereto shall be made pursuant to the law in effect before the operative date of this title.
trade secret misappropriation contractual remedies civil remedies
Section § 3426.8
This section ensures that the law is applied in a way that keeps it consistent and uniform with similar laws in other states that have adopted it.
This title shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this title among states enacting it.
uniform law interstate consistency harmonization
Section § 3426.9
This law says that if a part of it is found to be invalid or unenforceable, the rest of the law still stands and can be used. Basically, if one piece doesn't work, it doesn't ruin the whole thing. The sections of this law are designed to work independently, so if one part is thrown out, the others can still function.
If any provision of this title or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of the title which can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
severability independence of provisions invalidity
Section § 3426.10
This law says that it doesn't apply to any theft of trade secrets that happened before January 1, 1985. If someone started stealing secrets before that date and kept doing it afterwards, the law only applies to the actions taken on or after January 1, 1985. However, if the acts before that date weren't considered theft under the old laws, then those actions aren't covered, even if they continued after 1985.
This title does not apply to misappropriation occurring prior to January 1, 1985. If a continuing misappropriation otherwise covered by this title began before January 1, 1985, this title does not apply to the part of the misappropriation occurring before that date. This title does apply to the part of the misappropriation occurring on or after that date unless the appropriation was not a misappropriation under the law in effect before the operative date of this title.
misappropriation trade secrets January 1
Section § 3426.11
This section states that if someone intentionally and voluntarily shares a trade secret without the owner's permission, especially to a competitor, during any legal or official process, this action is not protected by legal privilege. This means that such disclosure can be used against the person in court. Additionally, the section does not limit the court's ability to manage access to evidence or affect the rights of people reporting corruption or improper activities in government or business.
Notwithstanding subdivision (b) of Section 47, in any legislative or judicial proceeding, or in any other official proceeding authorized by law, or in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure, the voluntary, intentional disclosure of trade secret information, unauthorized by its owner, to a competitor or potential competitor of the owner of the trade secret information or the agent or representative of such a
competitor or potential competitor is not privileged and is not a privileged communication for purposes of Part 2 (commencing with Section 43) of Division 1.
This section does not in any manner limit, restrict, impair, or otherwise modify either the application of the other subdivisions of Section 47 to the conduct to which this section applies or the court’s authority to control, order, or permit access to evidence in any case before it.
Nothing in this section shall be construed to limit, restrict, or otherwise impair, the capacity of persons employed by public entities to report improper government activity, as defined in Section 10542 of the Government Code, or the capacity of private persons to report improper activities of a private business.
trade secret disclosure unauthorized disclosure legal privilege
