PRINTER'S NO. 1005
No. 897 Session of 1997
INTRODUCED BY LESCOVITZ, BELARDI, GEORGE, GRUITZA, DALEY,
BATTISTO, TRELLO AND RAMOS, MARCH 13, 1997
REFERRED TO COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT,
MARCH 13, 1997
AN ACT
1 Amending Title 12 (Commerce and Trade) of the Pennsylvania
2 Consolidated Statutes, adding provisions relating to trade
3 secrets.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Title 12 of the Pennsylvania Consolidated
7 Statutes is amended by adding a chapter to read:
8 CHAPTER 53
9 TRADE SECRETS
10 Sec.
11 5301. Short title of chapter.
12 5302. Definitions.
13 5303. Injunctive relief.
14 5304. Damages.
15 5305. Attorney fees.
16 5306. Preservation of secrecy.
17 5307. Statute of limitations.
18 5308. Effect on other law.
1 § 5301. Short title of chapter.
2 This chapter shall be known and may be cited as the Uniform
3 Trade Secrets Act.
4 § 5302. Definitions.
5 The following words and phrases when used in this chapter
6 shall have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Improper means." Includes, but is not limited to, theft,
9 bribery, misrepresentation, breach or inducement of a breach of
10 a duty to maintain secrecy or espionage through electronic or
11 other means.
12 "Misappropriation." Includes:
13 (1) acquisition of a trade secret of another by a person
14 who knows or has reason to know that the trade secret was
15 acquired by improper means; or
16 (2) disclosure or use of a trade secret of another
17 without express or implied consent by a person who:
18 (i) used improper means to acquire knowledge of the
19 trade secret;
20 (ii) at the time of disclosure or use, knew or had
21 reason to know that his knowledge of the trade secret
22 was:
23 (A) derived from or through a person who had
24 utilized improper means to acquire it;
25 (B) acquired under circumstances giving rise to
26 a duty to maintain its secrecy or limit its use; or
27 (C) derived from or through a person who owed a
28 duty to the person seeking relief to maintain its
29 secrecy or limit its use; or
30 (iii) before a material change of his position, knew
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1 or had reason to know that it was a trade secret and that
2 knowledge of it had been acquired by accident or mistake.
3 "Person." A natural person, corporation, business trust,
4 estate, trust, partnership, association, joint venture,
5 government, governmental subdivision or agency or any other
6 legal or commercial entity.
7 "Trade secret." Information, including a formula, drawing,
8 pattern, compilation, program, device, method, technique or
9 process that:
10 (1) Derives independent economic value, actual or
11 potential, from not being generally known to, and not being
12 readily ascertainable by proper means by, other persons who
13 can obtain economic value from its disclosure or use.
14 (2) Is the subject of efforts that are reasonable under
15 the circumstances to maintain its secrecy.
16 § 5303. Injunctive relief.
17 (a) Injunctions.--Actual or threatened misappropriation may
18 be enjoined. Upon application to the court, an injunction shall
19 be terminated when the trade secret has ceased to exist, but the
20 injunction may be continued for an additional reasonable period
21 of time in order to eliminate commercial advantage that
22 otherwise would be derived from the misappropriation.
23 (b) Exceptional circumstances.--In exceptional
24 circumstances, an injunction may condition future use upon
25 payment of a reasonable royalty for no longer than the period of
26 time for which use could have been prohibited. Exceptional
27 circumstances include, but are not limited to, a material and
28 prejudicial change of position prior to acquiring knowledge or
29 reason to know of misappropriation that renders a prohibitive
30 injunction inequitable.
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1 (c) Affirmative acts compelled by court order.--In
2 appropriate circumstances, affirmative acts to protect a trade
3 secret may be compelled by court order.
4 § 5304. Damages.
5 (a) Monetary damages.--Except to the extent that a material
6 and prejudicial change of position prior to acquiring knowledge
7 or reason to know of misappropriation renders a monetary
8 recovery inequitable, a complainant is entitled to recover
9 damages for misappropriation. Damages can include both the
10 actual loss caused by misappropriation and the unjust enrichment
11 caused by misappropriation that is not taken into account in
12 computing actual loss. In lieu of damages measured by any other
13 methods, the damages caused by misappropriation may be measured
14 by imposition of liability for a reasonable royalty for a
15 misappropriator's unauthorized disclosure or use of a trade
16 secret.
17 (b) Exemplary damages.--If willful and malicious
18 misappropriation exists, the court may award exemplary damages
19 in an amount not exceeding twice any award made under subsection
20 (a).
21 § 5305. Attorney fees.
22 A court may award reasonable attorney fees to the prevailing
23 party:
24 (1) if a claim of misappropriation is made in bad faith;
25 (2) a motion to terminate an injunction is made or
26 resisted in bad faith; or
27 (3) willful and malicious misappropriation exists.
28 § 5306. Preservation of secrecy.
29 In any action under this chapter, a court shall preserve the
30 secrecy of an alleged trade secret by reasonable means which may
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1 include, but are not limited to, granting protective orders in
2 connection with discovery proceedings, holding in camera
3 hearings, sealing the records of the action and ordering any
4 person involved in the litigation not to disclose an alleged
5 trade secret without prior court approval.
6 § 5307. Statute of limitations.
7 An action for misappropriation must be brought within three
8 years after the misappropriation is discovered or by the
9 exercise of reasonable diligence should have been discovered.
10 For purposes of this section, a continuing misappropriation
11 constitutes a single claim.
12 § 5308. Effect on other law.
13 (a) General rule.--Except as provided in subsection (b),
14 this chapter displaces conflicting tort, restitutionary and
15 other law of this State providing civil remedies for
16 misappropriation of a trade secret.
17 (b) Exceptions.--This chapter does not affect:
18 (1) contractual remedies, whether or not based upon
19 misappropriation of a trade secret;
20 (2) other civil remedies that are not based upon
21 misappropriation of a trade secret; or
22 (3) criminal remedies, whether or not based upon
23 misappropriation of a trade secret.
24 Section 2. In applying and construing 12 Pa.C.S. Ch. 53,
25 comments or reports of the type referred to in 1 Pa.C.S. § 1939
26 shall control in the event of a conflict between such comments
27 or reports and the policy of uniformity provided under 1 Pa.C.S.
28 § 1927.
29 Section 3. This act shall not apply to misappropriation
30 occurring prior to the effective date of this act, including a
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1 continuing misappropriation that began prior to the effective
2 date of this act and which continues to occur after the
3 effective date of this act.
4 Section 4. This act shall take effect in 60 days.
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