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Uniform Trade Secrets Act

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Furthermore, the act stated in section 3(b) that if misappropriation is, "willful and malicious" the court may award damages up to twice what would otherwise be entitled under section 3(a). Restrictions similar to those imposed on the duration of injunctive relief are imposed on the duration of damages as well.
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The UTSA contained a prefatory note followed by 12 sections of proposed law. Each section was followed by a "comments" section that provided clarifications and examples as to the intent of the law. Section 1 presented definitions of key terms as they are used throughout the act. Sections 2–4 provided
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As a result, the UTSA sought to alleviate the uneven development and "uncertainty concerning the parameters of trade secret protection" by recommending a uniform trade secret law and, at the same time, allowing the states the flexibility to meet local circumstances by modifying the text as enacted in
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Regarding reasonable efforts to maintain secrecy, the UTSA maintained that actions such as restricting access to a "need-to-know basis" and informing employees that the information is secret met the criteria for reasonable efforts. The UTSA stated that the courts do not require procedures to protect
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Section 2 of the UTSA provided for injunctive relief from trade secret misappropriation. Section 2(a) stipulated, "Actual or threatened misappropriation may be enjoined". However, the length of the injunction was limited to the length of time the trade secret exists (i.e., remains unknown to some
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In addition to injunctive relief offered under the UTSA, parties may also receive damages. Section 3(a) states that, "Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss".
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Each party shall provide the legal means for any person to prevent trade secrets from being disclosed to, acquire by, or used by others without the consent of the person lawfully in control of the information in a manner contrary to honest commercial practices, in so far as:
485:, and published literature. The comments also clarified that improper means included actions that were, "improper under the circumstances; e.g., an airplane overflight used as aerial reconnaissance to determine the competitor's plant layout during construction of the plant". 534:
The UTSA noted that the types of accidents or mistakes that would lead to use of a learned trade secret being misappropriated did not include actions or mistakes that "constitute a failure of efforts that are reasonable under circumstances to maintain its secrecy".
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A trade secret ceases to exist when it is common knowledge within the community in which it is profitable. This means that the secret does not need to be known by the general public, but only throughout the industry that stands to profit from
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remedies that have emerged in many states. These remedies are based on legal precedent set by previous cases, and therefore allow for greater uncertainty, particularly in less industrial states where there have been fewer trade secret cases.
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Section 5 provided for the "preservation of secrecy"; namely that a court should take reasonable means to protect a trade secret during any legal action concerning the trade secret. These secretive measures can include sealing records and
552:(i) 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 629:. As an injunction may have prevented necessary equipment from reaching U.S. armed forces, the judge ordered that the misappropriator pay an appropriate royalty to the trade secret owner rather than imposing an injunction. 468:
Although not included in the definition itself, the original text of the UTSA provided clarification regarding the definition of proper and improper means. The comments refined the definition by listing several
866:'s Act Against Unfair Competition states, "any person who, in the course of business activity for purposes of competition, commits acts contrary to honest practices" and hold violators responsible for damages. 674:
remedies for misappropriation of a trade secret". The section also made clear that the UTSA did not affect (1) contractual remedies, (2) civil remedies not based on trade secret misappropriation, or (3)
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In view of the substantial number of patents that the courts invalidate, many businesses now elect to protect commercially valuable information by relying on the state trade secret protection law.
667:, requiring that any action under the UTSA must be "brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered". 621:
in place of an injunction under exceptional circumstances. The UTSA, in the comments for section 2, referenced a court case in which a misappropriated trade secret was used to build
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party who could profit from knowing the secret) plus sufficient time to eliminate any competitive advantage that could have been obtained by misappropriation of the trade secret.
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Section 4 of the UTSA stipulated that the court may award attorney's fees to the prevailing party for actions made in "bad faith or willful and malicious misappropriation".
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If, however, the courts ultimately decide that the Patent Office improperly issued a patent, an invention has been disclosed to competitors with no corresponding benefit.
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The UTSA notes that any confusion caused by having strictly common law remedies to trade secret misappropriation was exacerbated by omitting trade secret rules from the
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Of course, achieving the goal of uniformity depends upon the number of states that choose to adopt it. As of November 2020, the UTSA has been enacted by 48 states, the
525:(C) before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. 573:
A party that reverse engineers a trade secret may also obtain trade secret protection for their knowledge, provided the reverse engineering process is non-trivial.
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As of June 2019, the UTSA has been adopted by all states except New York and North Carolina (but its law is very similar and seems to borrow heavily from the act
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The UTSA provided several definitions of terms as they are used throughout the act. Some of these definitions are replicated here for the benefit of the reader.
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of individual state legislation. For example, goods may have been manufactured in State A, warehoused in State B, sold from State C, and delivered in State D.
897: 463:" includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. 95: 885: 1112: 1433: 735: 704:). On May 2, 2013, Texas enacted Senate Bill 953, becoming the 47th state to adopt the UTSA. The Texas statute took effect on September 1, 2013. 502:(i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or 290: 576:
Knowledge preventing loss of funds, such as that a particular idea does not work, is valuable and as such qualifies for trade secret protection.
1136: 1405: 752: 1100: 1001: 80: 1088: 702: 383: 198: 520:(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or 925: 692:
Sections 11 and 12 provided a date when the act took effect and the opportunity to explicitly list other acts to be repealed.
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uniform, which is especially important for companies that operate in more than one state. Historically, the law governing
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Section 7 stated that the UTSA superseded any existing "... tort, restitutionary, and other law of this State providing
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In addition to providing some recourse for any uncertainty associated with a patent, the UTSA also serves to codify the
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In addition to the possible enjoinment described in section 2(a), section 2(b) allowed for the payment of reasonable
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A valid patent provides a legal monopoly for seventeen years in exchange for public disclosure of an invention.
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In the United States there existed a prevalence of interstate commercial transactions that extended beyond the
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Multiple parties may hold rights to the same trade secret, as they may all individually derive value from it.
511:(B) at the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was 539: 489: 453: 413: 1063:
Glovsky, Mintz Levin Cohn Ferris; Renaud, Popeo PC-Michael T.; Armington, Nicholas W. (6 September 2018).
1152: 1116: 860:, those who obtain the trade secret in confidence shall not take unfair advantage of it without consent. 378:
The UTSA made note of the commercial value and competitive advantages inherent in trade secrets. Unlike
1238: 505:(ii) disclosure or use of a trade secret of another without express or implied consent by a person who 1261: 100: 517:(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or 1378: 904: 875: 555:(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 1132: 350:. As with other Uniform Acts, some states have modified language in their version of the statute. 105: 75: 65: 1448: 671: 664: 562:
The UTSA also provided refinement through comments to the definition of a trade secret itself:
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Section 8 stated the goal of making trade secret law uniform among states enacting the UTSA.
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Uniform Law Commission, National Conference of Commissioners on Uniform State Laws
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Section 9 provided a short title to refer to the act and section 10 described the
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Massachusetts adopted the Uniform Trade Secrets Act effective October 1, 2018.
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A prefatory note to the UTSA states some original motivations for the act:
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addressing whether social media accounts could constitute trade secrets
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for potential wrongs committed in violation of the act, including
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remedies, which may otherwise be of use to the aggrieved party.
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against "flagrant industrial espionage" were not necessary.
1065:"Massachusetts Adopts Uniform Trade Secrets Act | Lexology" 327:. One goal of the UTSA is to make the state laws governing 386:
level, trade secret misappropriation was addressed at the
1331:"S. Nuclear Operating Co., Inc. v. Elec. Data Sys. Corp" 811:
Southern Nuclear Operating Co. v. Elec. Data Sys. Corp.
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The following cases have directly referenced the UTSA:
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Trade secret law varies more from country to country.
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Data General Corp. v. Digital Computer Controls, Inc.
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Comprehensive Techs. Int'l v. Software Artisans, Inc.
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of trade secrets developed separately in each state.
1359:"Overview of International Trade Secret Protection" 1087:of some of the states that have passed the UTSA: 848:are dealt with on a country-by-country basis. In 1425: 979:"Uniform Trade Secrets Act with 1985 Amendments" 736:Rivendell Forest Prods. v. Georgia-Pacific Corp. 477:, including discovery by independent invention, 1262:"Cypress Semiconductor Corp. v. Superior Court" 1239:"Decision Insights, Inc. v. Sentia Group, Inc" 901:addressing secrecy given widespread disclosure 787:Decision Insights, Inc. v. Sentia Group, Inc. 593:for wrongs committed under the act, including 1036: 793:Cypress Semiconductor Corp. v. Superior Court 284: 1002:"Legislative Fact Sheet - Trade Secrets Act" 817: 81:Integrated circuit layout design protection 1379:"The Case for a Federal Trade Secrets Act" 1219:"R.C. Olmstead, Inc. v. CU Interface, LLC" 1032: 1030: 696: 414:second edition of the Restatement of Torts 291: 277: 1353: 1351: 1349: 1147: 1145: 922:The Case for a Federal Trade Secrets Act 856:"—i.e., regardless of the existence of a 373:Uniform Trade Secrets Act, Prefatory Note 1300: 1231: 1211: 589:The UTSA provided for several potential 315:(ULC) in 1979 and amended in 1985, is a 1434:United States intellectual property law 1371: 1323: 1254: 1027: 996: 994: 973: 971: 969: 967: 965: 963: 961: 382:protection, which was addressed at the 199:Limitations and exceptions to copyright 1426: 1346: 1188: 1176:"Ajaxo Inc. v. E*Trade Financial Corp" 1142: 1037:Glatzer Mason, Jessica (May 8, 2013). 959: 957: 955: 953: 951: 949: 947: 945: 943: 941: 754:DVD Copy Control Association v. Bunner 710:The UTSA has also been adopted in the 1083:The following are links to the state 926:Ajaxo Inc. v. E*Trade Financial Corp. 886:Glossary of legal terms in technology 157:Artificial intelligence and copyright 1196:"Silvaco Data Systems v. Intel Corp" 1168: 991: 608: 116:Supplementary protection certificate 1277: 938: 827:North American Free Trade Agreement 775:R.C. Olmstead, Inc. v. CU Interface 768:Silvaco Data Systems v. Intel Corp. 649: 13: 641: 444: 14: 1460: 1398: 761:Ajaxo v. E*Trade Financial Corp. 725: 246:Outline of intellectual property 71:Indigenous intellectual property 29: 16:Uniform act in the United States 1077: 1056: 1014: 881:Economic Espionage Act of 1996 1: 931: 353: 319:promulgated for adoption by 7: 1406:"Uniform Trade Secrets Act" 869: 584: 419: 194:Idea–expression distinction 10: 1465: 632: 1308:"Othentec Ltd. v. Phelan" 818:International application 305:Uniform Trade Secrets Act 905:Non-disclosure agreement 876:Defend Trade Secrets Act 1153:"Justmed, Inc. v. Byce" 697:Adoption by U.S. states 106:Plant genetic resources 76:Industrial design right 66:Geographical indication 842: 665:statute of limitations 560: 532: 466: 376: 313:Uniform Law Commission 177:Criticism of copyright 101:Plant breeders' rights 839:NAFTA Article 1711(1) 831: 663:Section 6 provided a 537: 487: 483:licensing arrangement 451: 360: 23:Intellectual property 854:breach of confidence 712:District of Columbia 340:District of Columbia 311:), published by the 911:PhoneDog v. Kravitz 805:Othentec v. Phelan 720:U.S. Virgin Islands 625:for use during the 623:military technology 479:reverse engineering 348:U.S. Virgin Islands 167:Copyright abolition 259:Higher categories: 251:Outline of patents 850:England and Wales 844:Trade Secrets in 609:Injunctive relief 595:injunctive relief 431:injunctive relief 301: 300: 1456: 1420: 1418: 1417: 1392: 1391: 1389: 1388: 1383: 1375: 1369: 1368: 1366: 1365: 1355: 1344: 1343: 1341: 1340: 1335: 1327: 1321: 1320: 1318: 1317: 1312: 1304: 1298: 1297: 1295: 1294: 1289: 1281: 1275: 1274: 1272: 1271: 1266: 1258: 1252: 1251: 1249: 1248: 1243: 1235: 1229: 1228: 1226: 1225: 1215: 1209: 1208: 1206: 1205: 1200: 1192: 1186: 1185: 1183: 1182: 1172: 1166: 1165: 1163: 1162: 1157: 1149: 1140: 1081: 1075: 1074: 1072: 1071: 1060: 1054: 1053: 1051: 1049: 1034: 1025: 1018: 1012: 1011: 1009: 1008: 998: 989: 988: 986: 985: 975: 840: 813:(11th Cir. 2008) 801:(S.D. Ohio 2008) 795:(Cal. App. 2008) 777:(N.D. Ohio 2009) 771:(Cal. App. 2010) 763:(Cal. App. 2010) 757:(Cal. App. 1994) 739:(10th Cir. 1994) 650:Other provisions 497:Misappropriation 374: 333:misappropriation 293: 286: 279: 162:Brand protection 96:Peasants' rights 33: 19: 18: 1464: 1463: 1459: 1458: 1457: 1455: 1454: 1453: 1424: 1423: 1415: 1413: 1412:(official site) 1404: 1401: 1396: 1395: 1386: 1384: 1381: 1377: 1376: 1372: 1363: 1361: 1357: 1356: 1347: 1338: 1336: 1333: 1329: 1328: 1324: 1315: 1313: 1310: 1306: 1305: 1301: 1292: 1290: 1287: 1285:"NCR v. Warner" 1283: 1282: 1278: 1269: 1267: 1264: 1260: 1259: 1255: 1246: 1244: 1241: 1237: 1236: 1232: 1223: 1221: 1217: 1216: 1212: 1203: 1201: 1198: 1194: 1193: 1189: 1180: 1178: 1174: 1173: 1169: 1160: 1158: 1155: 1151: 1150: 1143: 1082: 1078: 1069: 1067: 1061: 1057: 1047: 1045: 1035: 1028: 1019: 1015: 1006: 1004: 1000: 999: 992: 983: 981: 977: 976: 939: 934: 891:Biswamohan Pani 872: 841: 838: 820: 807:(4th Cir. 2008) 789:(4th Cir. 2011) 783:(9th Cir. 2010) 781:Justmed v. Byce 749:(4th Cir. 1993) 728: 699: 652: 644: 642:Attorney's fees 635: 611: 603:attorney's fees 587: 447: 445:Key definitions 439:attorney's fees 422: 375: 372: 356: 297: 261: 257: 172:Copyright troll 61:Farmers' rights 41:Authors' rights 17: 12: 11: 5: 1462: 1452: 1451: 1446: 1441: 1436: 1422: 1421: 1400: 1399:External links 1397: 1394: 1393: 1370: 1345: 1322: 1299: 1276: 1253: 1230: 1210: 1187: 1167: 1141: 1076: 1055: 1026: 1013: 990: 936: 935: 933: 930: 929: 928: 923: 920: 915: 907: 902: 894: 888: 883: 878: 871: 868: 836: 819: 816: 815: 814: 808: 802: 796: 790: 784: 778: 772: 764: 758: 750: 740: 727: 724: 698: 695: 694: 693: 690: 683: 680: 668: 661: 651: 648: 643: 640: 634: 631: 610: 607: 586: 583: 578: 577: 574: 571: 567: 559: 558: 557: 556: 553: 531: 530: 529: 528: 527: 526: 523: 522: 521: 518: 515: 509: 503: 465: 464: 461:Improper means 446: 443: 421: 418: 370: 355: 352: 299: 298: 296: 295: 288: 281: 273: 270: 269: 256: 255: 254: 253: 243: 238: 233: 228: 223: 222: 221: 219:Right to quote 216: 211: 206: 196: 191: 190: 189: 182:Bioprospecting 179: 174: 169: 164: 159: 154: 146: 145: 144:Related topics 141: 140: 139: 138: 133: 128: 123: 118: 113: 111:Related rights 108: 103: 98: 93: 88: 83: 78: 73: 68: 63: 58: 56:Database right 53: 48: 43: 35: 34: 26: 25: 15: 9: 6: 4: 3: 2: 1461: 1450: 1449:Trade secrets 1447: 1445: 1442: 1440: 1437: 1435: 1432: 1431: 1429: 1411: 1407: 1403: 1402: 1380: 1374: 1360: 1354: 1352: 1350: 1332: 1326: 1309: 1303: 1286: 1280: 1263: 1257: 1240: 1234: 1220: 1214: 1197: 1191: 1177: 1171: 1154: 1148: 1146: 1138: 1134: 1133:West Virginia 1130: 1126: 1122: 1118: 1114: 1110: 1106: 1102: 1098: 1094: 1090: 1086: 1080: 1066: 1059: 1044: 1040: 1033: 1031: 1024:, Texas, 2013 1023: 1017: 1003: 997: 995: 980: 974: 972: 970: 968: 966: 964: 962: 960: 958: 956: 954: 952: 950: 948: 946: 944: 942: 937: 927: 924: 921: 919: 916: 913: 912: 908: 906: 903: 900: 899: 895: 892: 889: 887: 884: 882: 879: 877: 874: 873: 867: 865: 861: 859: 855: 851: 847: 835: 830: 828: 823: 812: 809: 806: 803: 800: 799:NCR v. Warner 797: 794: 791: 788: 785: 782: 779: 776: 773: 770: 769: 765: 762: 759: 756: 755: 751: 748: 746: 745: 741: 738: 737: 733: 732: 731: 726:Notable cases 723: 721: 717: 713: 708: 705: 703: 691: 688: 684: 681: 678: 673: 669: 666: 662: 659: 654: 653: 647: 639: 630: 628: 624: 620: 615: 606: 604: 600: 596: 592: 582: 575: 572: 568: 565: 564: 563: 554: 551: 550: 548: 544: 543: 542: 541: 536: 524: 519: 516: 513: 512: 510: 507: 506: 504: 501: 500: 498: 494: 493: 492: 491: 486: 484: 480: 476: 472: 462: 458: 457: 456: 455: 450: 442: 440: 436: 432: 428: 417: 415: 410: 407: 402: 398: 396: 391: 389: 385: 381: 369: 366: 363: 359: 351: 349: 345: 341: 336: 334: 330: 329:trade secrets 326: 325:United States 322: 318: 314: 310: 306: 294: 289: 287: 282: 280: 275: 274: 272: 271: 268: 264: 260: 252: 249: 248: 247: 244: 242: 241:Public domain 239: 237: 234: 232: 229: 227: 224: 220: 217: 215: 212: 210: 207: 205: 202: 201: 200: 197: 195: 192: 188: 185: 184: 183: 180: 178: 175: 173: 170: 168: 165: 163: 160: 158: 155: 153: 150: 149: 148: 147: 143: 142: 137: 136:Utility model 134: 132: 129: 127: 124: 122: 119: 117: 114: 112: 109: 107: 104: 102: 99: 97: 94: 92: 89: 87: 84: 82: 79: 77: 74: 72: 69: 67: 64: 62: 59: 57: 54: 52: 49: 47: 44: 42: 39: 38: 37: 36: 32: 28: 27: 24: 21: 20: 1444:Uniform Acts 1414:. 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Retrieved 918:Trade secret 909: 896: 862: 843: 832: 824: 821: 810: 804: 798: 792: 786: 780: 774: 766: 760: 753: 747: 743: 734: 729: 709: 706: 700: 687:severability 645: 636: 616: 612: 588: 579: 561: 547:Trade secret 546: 538: 533: 496: 488: 470: 467: 460: 452: 448: 423: 411: 403: 401:each state. 399: 395:jurisdiction 392: 377: 367: 364: 361: 357: 337: 308: 304: 302: 267:Property law 258: 236:Pirate Party 231:Patent troll 214:Paraphrasing 204:Fair dealing 126:Trade secret 86:Moral rights 1093:Connecticut 716:Puerto Rico 689:of the act. 627:Vietnam War 344:Puerto Rico 317:Uniform Act 226:Orphan work 152:Abandonware 121:Trade dress 1428:Categories 1416:2024-08-06 1387:2011-11-07 1364:2011-11-07 1339:2011-10-18 1316:2011-10-18 1293:2011-10-18 1270:2011-10-18 1247:2011-10-18 1224:2011-10-18 1204:2011-10-18 1181:2011-10-18 1161:2011-10-18 1125:New Jersey 1089:California 1070:2018-09-10 1007:2020-11-20 984:2020-04-19 932:References 718:, and the 658:gag orders 540:UTSA § 1.4 490:UTSA § 1.2 454:UTSA § 1.1 406:common law 354:Motivation 346:, and the 1117:Minnesota 619:royalties 499:" means: 475:discovery 473:means of 187:Biopiracy 131:Trademark 51:Copyright 1129:Virginia 1105:Illinois 1097:Delaware 1043:Lexology 870:See also 858:contract 837:—  677:criminal 591:remedies 585:Remedies 427:remedies 420:Overview 371:—  263:Property 209:Fair use 46:Copyleft 1439:Secrecy 1137:Wyoming 1109:Indiana 1101:Florida 1048:May 15, 864:Germany 633:Damages 599:damages 435:damages 390:level. 384:federal 323:in the 1121:Nevada 846:Europe 601:, and 471:proper 380:patent 321:states 91:Patent 1382:(PDF) 1334:(PDF) 1311:(PDF) 1288:(PDF) 1265:(PDF) 1242:(PDF) 1199:(PDF) 1156:(PDF) 1085:codes 1020:S.B. 672:civil 388:state 1113:Iowa 1050:2013 825:The 437:and 309:UTSA 303:The 265:and 1022:953 570:it. 1430:: 1408:. 1348:^ 1144:^ 1135:, 1131:, 1127:, 1123:, 1119:, 1115:, 1111:, 1107:, 1103:, 1099:, 1095:, 1091:, 1041:. 1029:^ 993:^ 940:^ 714:, 605:. 597:, 481:, 433:, 416:. 342:, 1419:. 1390:. 1367:. 1342:. 1319:. 1296:. 1273:. 1250:. 1227:. 1207:. 1184:. 1164:. 1139:. 1073:. 1052:. 1010:. 987:. 660:. 545:" 495:" 459:" 307:( 292:e 285:t 278:v

Index

Intellectual property

Authors' rights
Copyleft
Copyright
Database right
Farmers' rights
Geographical indication
Indigenous intellectual property
Industrial design right
Integrated circuit layout design protection
Moral rights
Patent
Peasants' rights
Plant breeders' rights
Plant genetic resources
Related rights
Supplementary protection certificate
Trade dress
Trade secret
Trademark
Utility model
Abandonware
Artificial intelligence and copyright
Brand protection
Copyright abolition
Copyright troll
Criticism of copyright
Bioprospecting
Biopiracy

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