Bill Text: NY A01657 | 2019-2020 | General Assembly | Introduced

Bill Title: Relates to creating the uniform trade secrets act.

Spectrum: Slight Partisan Bill (Democrat 6-3)

Status: (Introduced) 2019-01-16 - referred to judiciary [A01657 Detail]

Download: New_York-2019-A01657-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 16, 2019
        Introduced  by  M.  of  A.  VANEL, DICKENS, MOSLEY, HYNDMAN, RA, GIGLIO,
          COOK, SEAWRIGHT -- Multi-Sponsored by -- M. of  A.  LAWRENCE  --  read
          once and referred to the Committee on Judiciary
        AN  ACT to amend the general business law and the civil practice law and
          rules, in relation to the uniform trade secrets act
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. The general business law is amended by adding a new article
     2  17-B to read as follows:
     3                                ARTICLE 17-B
     4                          UNIFORM TRADE SECRETS ACT
     5  Section 279-m. Short title.
     6          279-n. Definitions.
     7          279-o. Injunctive relief.
     8          279-p. Damages.
     9          279-q. Attorney's fees.
    10          279-r. Preservation of secrecy.
    11          279-s. Statute of limitations.
    12          279-t. Effect on other law.
    13          279-u. Uniformity of application and construction.
    14          279-v. Severability.
    15    §  279-m.  Short  title.  This  article shall be known as the "uniform
    16  trade secrets act".
    17    § 279-n. Definitions. As used in  this  article,  unless  the  context
    18  requires otherwise:
    19    (a)  "Improper  means"  includes  theft,  bribery,  misrepresentation,
    20  breach or inducement of a breach of a duty to maintain secrecy, or espi-
    21  onage through electronic or other means;
    22    (b) "Misappropriation" means: (1) acquisition of  a  trade  secret  of
    23  another  by  a  person  who  knows  or has reason to know that the trade
    24  secret was acquired by improper means; or  (2)  duplicating,  sketching,
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

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     1  drawing,  photographing,  downloading,  uploading, concealing, altering,
     2  destroying, replicating,  transmitting,  delivering,  sending,  mailing,
     3  communicating, or conveying a trade secret without authorization; or (3)
     4  receiving,  buying,  or  possessing  a trade secret, knowing the same to
     5  have been stolen or appropriated, obtained, or converted without author-
     6  ization; or (4) disclosure or use of a trade secret of  another  without
     7  express or implied consent by a person who:
     8    (i) used improper means to acquire knowledge of the trade secret; or
     9    (ii) at the time of disclosure or use, knew or had reason to know that
    10  his or her knowledge of the trade secret was:
    11    (A)  derived  from or through a person who had utilized improper means
    12  to acquire it;
    13    (B) acquired under circumstances giving rise to a duty to maintain its
    14  secrecy or limit its use; or
    15    (C) derived from or through a person who owed a  duty  to  the  person
    16  seeking relief to maintain its secrecy or limit its use; or
    17    (iii)  before  a  material  change of his or her position, knew or had
    18  reason to know that it was a trade secret and that knowledge of  it  had
    19  been acquired by accident or mistake;
    20    (c)  "Person"  means  a natural person, corporation, limited liability
    21  company, business trust, estate, trust, partnership, association,  joint
    22  venture,  government,  governmental  subdivision or agency, or any other
    23  legal or commercial entity; and
    24    (d) "Trade secret" means any form and  type  of  financial,  business,
    25  scientific, technical, economic, or engineering information, including a
    26  pattern,  plan, compilation, program device, formula, design, prototype,
    27  method, technique, process, procedure, program, or code, whether  tangi-
    28  ble  or intangible, and whether or how stored, compiled, or memorialized
    29  physically, electronically, graphically, photographically or in writing,
    30  that:
    31    (1) derives independent economic value, actual or potential, from  not
    32  being  generally known to, and not being readily ascertainable by proper
    33  means by, other persons who can obtain economic value from  its  disclo-
    34  sure or use; and
    35    (2)  is  the  subject of efforts that are reasonable under the circum-
    36  stances to maintain its secrecy.
    37    § 279-o. Injunctive relief. (a) Actual or threatened  misappropriation
    38  may  be temporarily, preliminarily, or permanently enjoined. Upon appli-
    39  cation to the court, an injunction  shall  be  vacated  when  the  trade
    40  secret  has  ceased to exist, but the injunction may be continued for an
    41  additional reasonable period of time in order  to  eliminate  commercial
    42  advantage that otherwise would be derived from the misappropriation.
    43    (b)  In  exceptional circumstances, an injunction may condition future
    44  use upon payment of a reasonable royalty for no longer than  the  period
    45  of  time  for  which use could have been prohibited. Exceptional circum-
    46  stances include, but are not limited  to,  a  material  and  prejudicial
    47  change  of  position  prior  to acquiring knowledge or reason to know of
    48  misappropriation that renders a prohibitive injunction inequitable.
    49    (c) In appropriate circumstances, the court may order affirmative acts
    50  to protect a trade secret.
    51    § 279-p. Damages. (a) Except to the extent that a material and  preju-
    52  dicial change of position prior to acquiring knowledge or reason to know
    53  of misappropriation renders a monetary recovery inequitable, a complain-
    54  ant  is  entitled  to  recover damages for misappropriation. Damages can
    55  include both the actual loss caused by misappropriation and  the  unjust
    56  enrichment  caused by misappropriation that is not taken into account in

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     1  computing actual loss. In lieu of damages measured by any other methods,
     2  the damages caused by misappropriation may be measured by imposition  of
     3  liability  for a reasonable royalty for a misappropriator's unauthorized
     4  disclosure or use of a trade secret.
     5    (b)  If  willful  or  malicious misappropriation exists, the court may
     6  award exemplary damages in an amount not exceeding twice any award  made
     7  under subdivision (a) of this section.
     8    §  279-q.  Attorney's fees. If (a) a claim of misappropriation is made
     9  or continued in bad faith, (b) a motion to terminate  an  injunction  is
    10  made  or  resisted  or continued in bad faith, or (c) a willful or mali-
    11  cious misappropriation exists, the court may award reasonable attorney's
    12  fees to the prevailing party. For purposes of this section, a  claim  of
    13  misappropriation is made or continued in bad faith or a motion to termi-
    14  nate  an  injunction is made or resisted or continued in bad faith if it
    15  is undertaken or continued solely to harass or maliciously injure anoth-
    16  er or to delay or prolong the resolution of the  litigation;  or  it  is
    17  undertaken  or continued without any reasonable basis in fact or law and
    18  could not be supported by  a  good  faith  argument  for  an  extension,
    19  modification or reversal of existing law.
    20    §  279-r.  Preservation of secrecy. In an action under this article, a
    21  court shall preserve the secrecy of an alleged trade secret  by  reason-
    22  able  means, including but not limited to, granting protective orders in
    23  connection with discovery devices pursuant to the provisions of  section
    24  thirty-one  hundred  three  of the civil practice law and rules, holding
    25  in-camera hearings, sealing the records of the action, and ordering  any
    26  person  involved  in  the  litigation  not  to disclose an alleged trade
    27  secret without prior court approval.
    28    § 279-s. Statute  of  limitations.  Notwithstanding  any  inconsistent
    29  provision  of law, an action for misappropriation must be brought within
    30  three years after the misappropriation is discovered or by the  exercise
    31  of reasonable diligence should have been discovered. For the purposes of
    32  this section, a continuing misappropriation constitutes a single claim.
    33    §  279-t.  Effect  on other law. (a) Except as provided in subdivision
    34  (b) of this section, this article displaces conflicting  tort,  restitu-
    35  tionary, and other law of this state providing civil remedies for misap-
    36  propriation of a trade secret.
    37    (b) This article does not affect:
    38    (1)  contractual  remedies, whether or not based upon misappropriation
    39  of a trade secret;
    40    (2) other civil remedies that are not based upon misappropriation of a
    41  trade secret; or
    42    (3) criminal remedies, whether or not based upon misappropriation of a
    43  trade secret.
    44    § 279-u. Uniformity of  application  and  construction.  This  article
    45  shall be applied and construed to effectuate its general purpose to make
    46  uniform the law with respect to the subject of this article among states
    47  enacting it.
    48    §  279-v. Severability. If any provision of this article or its appli-
    49  cation to any person or circumstances is held  invalid,  the  invalidity
    50  does  not  affect other provisions or applications of this article which
    51  can be given effect without the invalid provision or application, and to
    52  this end the provisions of this article are severable.
    53    § 2. Section 8303-a of the civil practice law and rules is amended  by
    54  adding a new subdivision (d) to read as follows:
    55    (d) The provisions of this section shall not apply to actions governed
    56  by article seventeen-B of the general business law.

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     1    § 3. This act shall take effect on the one hundred eightieth day after
     2  it  shall  have become a law, except that the provisions of article 17-B
     3  of the general business law, as added by section one of this act,  shall
     4  not  apply to a misappropriation occurring prior to such effective date.
     5  With  respect  to a continuing misappropriation that began prior to such
     6  effective date, this act shall not apply to the continuing  misappropri-
     7  ation that occurs after such effective date.