Note: This page covers information specific to Arizona. See the Trade Secrets overview for more general information.
The Arizona Uniform Trade Secrets Act ("AUTSA") is located at chapter 4 of title 44 of the Arizona Revised Statutes. AUTSA is largely identical to the Uniform Trade Secrets Act. For generally applicable information on trade secrets, see Basics of a Trade Secret Claim and Publishing Trade Secrets.
Like the Uniform Trade Secret Act, AUTSA prohibits "misappropriation" of trade secrets and provides certain remedies.
A.R.S. § 44-401 defines the key terms of AUTSA:
Trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that both:
- (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.
Only those secrets affording a demonstrable competitive advantage may be considered trade secrets, and value will be inferred if the owner can show that the information confers upon it an economic advantage over others in the industry. Enterprise Leasing Co. of Phoenix v. Ehmke, 3 P.3d 1064, 1069-70 (Ariz. Ct. App. 1999). The Arizona Court of Appeals has recognized as trade secrets both: a compilation of customer-service factors in managing a car-rental business; and financial records that the owner treated as secret, even if the information they contain is old or outdated. Id.
The Arizona Court of Appeals has indicated that trade secrets contained in public records may be protected by the confidentiality exception to Arizona's public records laws. Phoenix Newspapers, Inc. v. Keegan, 35 P.3d 105, 112 (Ariz. Ct. App. 2001).
Misappropriation means either:
- (a) 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
- (b) Disclosure or use of a trade secret of another without express or implied consent by a person who either:
- (i) Used improper means to acquire knowledge of the trade secret;
- (ii) At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was derived from or through a person who had utilized improper means to acquire it, was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or was 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 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.
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. The Arizona Court of Appeals has ruled that use of secret documents legitimately obtained during employment after that employment has ended can constitute improper means. Ehmke, 3 P.3d at 1071.
Note that the First Amendment may protect you from civil liability or criminal prosecution for publishing trade secrets, provided you were not engaged in the improper conduct that led to the secrets' misappropriation. This potential protection stems from a case called Bartnicki v. Vopper, 532 U.S. 514 (2001). See Publishing Trade Secrets for more information about this case.
For generally applicable information on how a trade secrets claim works, see Basics of a Trade Secret Claim.
If the court finds that a defendant has misappropriated a plaintiff's trade secret(s), it may impose the following remedies:
- Injunctive Relief: AUTSA empowers a court to order a defendant to stop violating the plaintiff's rights and to take steps to preserve the secrecy of the plaintiff's information. See A.R.S. § 44-402. Most importantly, this means that a court has the authority, as far as the law of trade secrets goes, to order you to stop publishing someone's trade secrets if it finds that your publication amounts to misappropriation. The First Amendment to the U.S. Constitution may limit the court's ability to do so, however. For details, see Publishing Trade Secrets.
- Damages: A court can make a defendant pay money damages to the plaintiff for the economic harm suffered as a result of a trade secret violation. This may include the plaintiff's losses resulting from the misappropriation and the defendant's profits derived from it. If the court determines that the defendant acted willfully or maliciously, it may award the plaintiff punitive damages in an amount up to twice its actual damages. See A.R.S. § 44-403.
- Attorney's Fees: If a plaintiff sues and wins, the court may award attorneys' fees if it finds that the defendant acted willfully or maliciously. On the other hand, if the defendant wins, the court may award attorneys' fees if it finds that the plaintiff acted in bad faith when filing the lawsuit. The court may also award attorneys’ fees if it finds that a motion to terminate an injunction is made or resisted in bad faith. See A.R.S. § 44-404.
Statute of Limitations
The statute of limitations for a trade secret claim in Arizona is three years. See A.R.S. § 44-406.