Deciding what is considered a trade secret under Utah statute can be difficult

Misappropriation of trade secrets can have a significant impact on real world businesses, particularly when they fall into competitors’ hands. The Utah Uniform Trade Secrets Act (UTSA) was aimed at preventing such misappropriation and harms. Last year, the Utah Court of Appeals had to interpret how the Act applied to a couple of claimed trade secrets. Read on to find out how it decided these questions.

Trade secrets under the UTSA

The UTSA prohibits the misappropriation of the trade secrets of a person or business. A “trade secret” has particular definition under the UTSA: It is “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (a) 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 (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

In other words, a trade secret has independent economic value because it’s a secret. The burden is on the party claiming that certain information is a trade secret to show that the information meets this definition.

“Misappropriation” is also defined in the statute. It is the “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 the “disclosure or use of a trade secret” without consent, explicit or implied.