New Jersey recently enacted the New Jersey Trade Secrets Act (A-921/S-2456) (the “Act”) that provides protections against trade secret misappropriation. Prior to the enactment, New Jersey relied on existing case law to establish a trade secret misappropriation and was one of four states that had not adopted the provisions of the Uniform Trade Secrets Act (“UTSA”). Massachusetts, New York and Texas are the other states that have not adopted some form of the UTSA.
The Act establishes protections against both actual and threatened trade secret misappropriation, and it also provides for damages for both actual loss and unjust enrichment caused by the misappropriation. Damages may also be measured by a reasonable royalty for a misappropriator’s unauthorized disclosure or use of a trade secret. In case of willful or malicious misappropriation, a court may award punitive damages, reasonable attorney’s fees, costs and a reasonable sum to cover the services of expert witnesses. The Act also changes the statute of limitations on trade secret misappropriation cases from six years to three years. Finally, the Act requires a court to preserve the secrecy of an alleged trade secret by reasonable means consistent with court rules.
The Act takes effect immediately, but does not apply retroactively. Therefore, misappropriations occurring before the enactment are subject to the requirements and remedies of the common law, as well as the six-year statute of limitations.
To learn more about how this new law may affect your company or if you have any questions regarding this issue, be sure to contact your employment counsel at Smith, Gambrell & Russell, LLP.