Maryland Uniform Trade Secrets Act

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Md. COMMERCIAL LAW Code Ann. § 11-1201 through 11-1209 (2011)

§ 11-1201. Definitions

(a) In general. -- In this subtitle the following words have the meanings indicated.

(b) Improper means. -- "Improper means" includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.

(c) Misappropriation. -- "Misappropriation" means the:

(1) 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

(2) Disclosure or use of a trade secret of another without express or implied consent by a person who:

(i) Used improper means to acquire knowledge of the trade secret; or

(ii) At the time of disclosure or use, knew or had reason to know that the person's knowledge of the trade secret was:

1. Derived from or through a person who had utilized improper means to acquire it;

2. Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

3. Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or

(iii) Before a material change of the person's 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.

(d) Person. -- "Person" means an individual, corporation, business trust, statutory trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.

(e) Trade secret. -- "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) 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

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

§ 11-1202. Misappropriation of trade secrets may be enjoined

(a) In general. -- Actual or threatened misappropriation may be enjoined.

(b) Termination of injunction. -- Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.

(c) Payment of royalty. -- In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited.

(d) Affirmative acts. -- In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.

(e) "Exceptional circumstances" defined. -- In this section, "exceptional circumstances" includes a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation that renders a prohibitive injunction inequitable.

§ 11-1203. Right to damages

(a) In general. -- Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation.

(b) Items included. -- Damages under this subtitle may include:

(1) The actual loss caused by misappropriation; and

(2) The unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.

(c) Alternate measure of damages. -- In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.

(d) Exemplary damages. -- If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award made under subsection (a) of this section.

§ 11-1204. Award of attorney's fees

The court may award reasonable attorney's fees to the prevailing party if:

(1) A claim of misappropriation is made in bad faith;

(2) A motion to terminate an injunction is made or resisted in bad faith; or

(3) Willful and malicious misappropriation exists.

§ 11-1205. Preservation of trade secret during action

In an action under this subtitle, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.

§ 11-1206. Limitations

(a) In general. -- An action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.

(b) Continuing misappropriation. -- For the purposes of this section, a continuing misappropriation constitutes a single claim.

§ 11-1207. Subtitle constitutes exclusive remedy

(a) In general. -- Except as provided in subsection (b) of this section, this subtitle displaces conflicting tort, restitutionary, and other law of this State providing civil remedies for misappropriation of a trade secret.

(b) Exceptions. --

(1) This subtitle does not affect:

(i) Contractual remedies, whether or not based upon misappropriation of a trade secret;

(ii) Other civil remedies that are not based upon misappropriation of a trade secret; or

(iii) Criminal remedies, whether or not based upon misappropriation of a trade secret.

(2) Nothing contained in this act may be applied or construed to waive or limit any common law or statutory defense or immunity possessed by State personnel as defined under § 12-101 of the State Government Article.

§ 11-1208. Application and construction

This subtitle shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this subtitle among states enacting it.

§ 11-1209. Short title

This subtitle may be cited as the "Maryland Uniform Trade Secrets Act".