Note: This page covers information specific to New Jersey. See the Trade Secrets overview for more general information.
New Jersey has not adopted a version of the Uniform Trade Secrets Act (UTSA), which is discussed in the Basics of a Trade Secret Claim. In fact, New Jersey does not have a statute governing trade secrets law. Instead, it is based solely on the common law, which is the compilation of prior court decisions in the state. Like the UTSA, however, New Jersey law creates civil liability for "misappropriation" of someone else's trade secret(s). New Jersey's criminal laws relating to theft may also impose criminal liability for stealing trade secrets.
New Jersey courts have adopted the definition of trade secret from Section 757 of the Restatement of Torts: "A trade secret consists of a formula, process, device, or compilation which one uses in his business and which gives him an opportunity to obtain an advantage over competitors who do not know or use it." The Restatement of Torts explains further that a trade secret differs from other secret information in a business in that it is not simply information about single or ephemeral events, but rather a process or device for continuous use in the operation of the business. From a practical perspective, this definition of "trade secret" is similar to that discussed in Basics of a Trade Secret Claim.
The general meaning of "misappropriation" under New Jersey law is not entirely clear because many of the cases focus on situations where former employees passed secrets to a competitor, but it looks like misappropriation can happen in two ways, discussed in detail in the Basics of a Trade Secret Claim. First, you commit misappropriation if you personally acquire a trade secret by improper means. "Improper means" includes criminal acts, such as theft, fraud, breaking and entering, trespass, and bribing and swindling, as well as acts taken to overcome measures put in place to maintain secrecy of the trade secret information, such as fraud, interference with contractual obligations, and breach of a contract in obtaining or using the trade secret. Reverse engineering and independent development are not "improper means." Second, you commit misappropriation if you publish a trade secret while knowing that the person who gave you the information acquired it through improper means or under circumstances giving rise to a duty to maintain its secrecy or limit its use.
If a court finds that a defendant has misappropriated a plaintiff's trade secret(s), it may impose the following penalties and remedies:
- Injunctive Relief: A court may order a defendant to stop violating the plaintiff's rights and to take steps to preserve the secrecy of the plaintiff's information. 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. Punitive damages and attorneys' fees may be available in exceptional circumstances.
Statute of Limitations
The statute of limitations for a trade secret claim in New Jersey is six years.