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New law protects trade secrets of New Jersey businesses

A bill just signed into law by Gov. Chris Christie promises to help protect the trade secrets of businesses across New Jersey by establishing specific remedies when intellectual property such as a formula, design, prototype or invention is misappropriated.

A trade secret is defined by law as information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Misappropriation means the acquisition of a trade secret by a person who either knows or has reason to know the secret was acquired by improper means, improper disclosure or use of a trade secret without consent of the trade secret owner. If the holder of a trade secret finds evidence of misappropriation, he or she can seek the following remedies:

• Damages for the actual loss suffered and for unjust enrichment of the defendant caused by the misappropriation. The trade secret holder can also try to impose a royalty.

• Injunctive relief for actual or threatened misappropriation of a trade secret. In some cases, a trade secret holder may be able to grant future use of the information on the condition of a paid royalty.

• Punitive damages, in cases where the misappropriation was found to be willful or malicious. The damages must not exceed twice the amount awarded for damages and unjust enrichment.

A court will also be able to award attorney fees in cases where willful and malicious appropriation exists, a claim of misappropriation is made in bad faith, or a motion to terminate an injunction is made or resisted in bad faith. If the defendant in a misappropriation case is a public entity or employee, the provisions of the New Jersey Tort Claims Act supersedes any conflicting provision of the bill.

Both the state House and Senate approved the bill unanimously and takes effect immediately. Although it doesn’t apply to past or ongoing cases, it provides necessary legal consequences to those who wrongly disclose confidential information for all state businesses going forward.

Source:, “Scutari’s ‘New Jersey Trade Secrets Act’ Now Law,” Trish Graber, Jan. 9, 2012

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