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New Law Encourages Innovation to Create Jobs & Economic Development

(TRENTON) — Legislation sponsored by Assemblyman Upendra Chivukula to help protect the trade secrets so important to many New Jersey businesses is now law.

The new law (formerly A-921) creates the “New Jersey Trade Secrets Act,” and is based on legislation adopted in 46 states and the District of Columbia.

It’s part of ongoing Democratic efforts to create jobs and economic development.

“New Jersey has long been the home to innovation, and in the ever increasingly competitive global marketplace, we need to do what we can to ensure those innovations and ideas remain protected from piracy and theft,” said Chivukula (D-Somerset/Middlesex). “New Jersey businesses deserve the same protections given to those in 46 states and D.C., especially if we’re going to encourage innovation and the job creation and economic growth they bring.”

Under the law, a trade secret is defined as information held by one or more people, including a formula, pattern, business data compilation, program, device, method, technique, design, diagram, drawing, invention, plan, procedure, prototype or process, 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.

“The ideas, inventions and innovations that make New Jersey businesses leaders throughout the world are vital to the long-term strategy and economic strength,” Chivukula said. “Those who would steal these ideas need to clearly know the consequences of their actions.”

The law sets forth remedies that are available to the holder of a trade secret that has been misappropriated, which include:

  • Damages for both the actual loss suffered by the plaintiff and for any unjust enrichment of the defendant caused by the misappropriation. Damages may also include the imposition of a reasonable royalty for unauthorized disclosure or use;
  • Injunctive relief for actual or threatened misappropriation of a trade secret. Under certain exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty;
  • In cases involving the willful and malicious misappropriation of a trade secret, punitive damages, if awarded by the court, in an amount not exceeding twice that awarded for actual damages and unjust enrichment; and
  • The award of attorney’s fees by the court if willful and malicious misappropriation exists, a claim of misappropriation is made in bad faith or a motion to terminate an injunction is made or resisted in bad faith.

The new law also contains language indicating that if a public entity or employee is the defendant in any action brought for the misappropriation of a trade secret, the provisions of the New Jersey Tort Claims Act would supersede any conflicting provision of the bill.