Utah Non-Disclosure Agreement
The Utah Non-Disclosure Agreement (NDA) is a legal instrument that puts protections in place to minimize the chances of confidential information being stolen and used unlawfully. Formed between two parties—the Disclosing Party and the Receiving Party—the binding contract unambiguously states what confidential information from the former party can and cannot be lawfully shared by the latter party. If it eventuates that the Receiving Party disclosed any sensitive information covered by the NDA, the Disclosing Party has pursue legal remedies in a court of law. In order to understand the full scope of legal protections available, an explanation of Utah’s law regarding Trade Secrets can be referred to in the sections below.
A Case Study Example Showing the Power of the Uniform Trade Secrets Act
Companies with confidential information to protect may wonder if it is worth their while to execute an NDA under the Uniform Trade Secrets Act (further explained in the section below). The following case study example highlights the effectiveness of the Uniform Trade Secrets Act in bringing those who have misappropriated trade secrets to justice.
As explained by Trade Secrets Law, in 2012, a Utah judge awarded nearly $3 million in damages to the tech company Storagecraft Technology Corp for the misappropriation of their trade secrets under the Uniform Trade Secrets Act. The court awarded the damages after ruling that a former employee of the company, Kirby, willfully and maliciously misappropriated the copyrighted company’s confidential source code.
The sizable amount of damages rewarded highlights the power of the Uniform Trade Secrets Act in compensating victims of trade secret misappropriation. What was particularly significant about this case is that it demonstrated that the Receiving Party does not necessarily need to have profited from misappropriating the Disclosing Party’s trade secret in order for the court to rule in favor of the Disclosing Party.
Trade Secret Law
When signing an NDA in the state of Utah, understanding how the state views and punishes those that steal and misuse trade secrets can prove invaluable. Utah is one of forty-eight (48) states that adopted the Uniform Trade Secrets Act (UTSA). The state kept the general structure typically found in trade secret chapters by including sections that cover injunctions, damages, the statute of limitations, and other important facets. To give you a general understanding of Utah’s UTSA (Title 13 Chapter 24), each section, along with a summary of each, is listed below.
- § 13-24-1: “Short Title” – The citeable title of the act, which is the “Uniform Trade Secrets Act.”
- § 13-24-2: “Definitions” – Gives four (4) definitions commonly found throughout the chapter.
- § 13-24-3: “Injunctive relief” – An injunction is court order that forces a certain action to be stopped. This section covers the contexts in which injunctions related to trade secrets will be issued, stopped, and other important injunction-related information.
- § 13-24-4: “Damages” – Consists of two (2) points, the first covering when damages will be awarded and what the damages can include, the second being the award given if the misappropriation that occurred was malicious (purposeful).
- § 13-24-5: “Attorney’s fees” – If misappropriation was willful or malicious, a request to have an injunction terminated was made unjustly, or the misappropriation was generally made in “bad faith,” the court can pay for the winning party’s attorney’s fees.
- § 13-24-6: “Preservation of secrecy” – What the court will do to protect trade secrets during proceedings.
- § 13-24-7: “Statute of limitations” – Upon discovering misappropriation, the victim has three (3) years to bring about “an action for misappropriation.”
- § 13-24-8: “Effect on other law” – States what the law applies to, and the fact it does not affect contractual remedies, other civil remedies, and criminal remedies.
- § 13-24-9: “Uniformity of application and construction” – A general section referring to Utah’s efforts of making their Uniform Trade Secrets Act consistent with the other states that adopted the act.
How to Write
Step 2 – Once the copy has been reviewed and edited (as needed), the Date should be noted at the top of the first page. Both the Disclosing Party (the party with the trade secrets) and the Receiving Party (the party who will become privy to the Disclosing Party’s trade secrets) will then need to their Names and Addresses in the appropriate sections provided.
Step 3 – In the table found on the second (2nd) and final page of the Non-Disclosure document, the two (2) parties will need to subsequently write their Printed Names, Company Titles, Signatures, and the Dates in which they signed the document. Once all of the information detailed above has been provided and the parties’ signatures have been written, the contract will be lawfully executed.