Pennsylvania recently adopted a new law prohibiting the theft of trade secrets. The new statute, known as the Uniform Trade Secrets Act (the "Act"), goes into effect on April 19, 2004. The Act expands the rights of the aggrieved trade secret owner in terms of the amount of damages that may be recovered and the length of time after a trade secret theft during which suit may be filed.

Unlike the old common law remedies available to a trade secret owner, the Act expands the ability of the owner to bring suit and recover more money damages from defendants. Those expanded rights include:

In some respects, the Act merely codifies the common law approach to trade secrets. Most importantly, the statute does not generally change the definition of what is a trade secret. Both the statute and the common law require that a trade secret:

• Provide economic benefit to its owners from not generally being known by others;
• Is subject to reasonable efforts to maintain its secrecy; and
• Must not be known or available to others through legitimate means – such as a trade publication.

There are two other significant ways in which the new statute mirrors the common law. Both allow the trade secret owner to enter into contracts with others that alter the owner’s rights from that provided by the Act. Secondly, both provide the owner with the ability to obtain an injunction against the misappropriators and those working with them, preventing them from making use of the purloined secret in any way.

In one respect, the Act appears to expand the definition of a trade secret regarding customer information. Pennsylvania’s courts have repeatedly stated that customer lists are at the "very periphery" of trade secret information. However, by specifically including customer lists in the definition of a trade secret, the Act places added focus on the protectibility of customer information. Although such information must still not be readily available to the public in order to attain trade secret status, from a practical standpoint, the inclusion of customer lists in the definition of trade secret may make courts more willing to afford protection to such information.

To benefit from this new law, a trade secret owner must work with its legal counsel to:

• Periodically evaluate just what should be considered a trade secret;
• Take reasonable steps to vigilantly protect the secrecy of its proprietary information (including considering the use of non-compete agreements); and
• Use the Act as a deterrent by educating employees and others about the serious consequences of trade secret theft.

Tucker Arensberg can assist in these efforts by performing a Trade Secret Audit to ensure that you are properly protecting your most valuable assets. For more information, please call Steve Silverman at 412.594.5609.