Senate Bill No. 375–Senator Schneider
March 11, 1999
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Referred to Committee on Commerce and Labor
SUMMARY—Makes various changes to provisions governing trade secrets. (BDR 52-900)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: Yes.
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EXPLANATION – Matter in
bolded italics is new; matter between brackets
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1. Chapter 600A of NRS is hereby amended by adding thereto1-2
a new section to read as follows:1-3
A person who, with intent to injure an owner of a trade secret or with1-4
reason to believe that his actions will injure an owner of a trade secret,1-5
without limitation:1-6
1. Steals, misappropriates, takes or conceals a trade secret or obtains1-7
a trade secret through fraud, artifice or deception;1-8
2. Wrongfully copies, duplicates, sketches, draws, photographs,1-9
alters, destroys, photocopies, replicates, transmits, delivers, sends, mails,1-10
communicates or conveys a trade secret;1-11
3. Receives, buys or possesses a trade secret with knowledge or1-12
reason to know that the trade secret was obtained as described in1-13
subsection 1 or 2;1-14
4. Attempts to commit an offense described in subsection 1, 2 or 3;1-15
5. Solicits another person to commit an offense described in1-16
subsection 1, 2 or 3; or2-1
6. Conspires to commit an offense described in subsection 1, 2 or 3,2-2
and one of the conspirators performs an act to further the conspiracy,2-3
is guilty of a category C felony and shall be punished by imprisonment in2-4
the state prison for a minimum term of not less than 1 year and a2-5
maximum term of not more than 10 years and may be further punished2-6
by a fine of not more than $100,000.2-7
Sec. 2. NRS 600A.030 is hereby amended to read as follows: 600A.030 As used in this chapter, unless the context otherwise2-9
requires:2-10
1. "Improper means" includes2-11
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(a) Theft;2-13
(b) Bribery;2-14
(c) Misrepresentation;2-15
(d) Breach or inducement of a breach of a duty to maintain secrecy2-16
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(e) Breach or inducement of a breach of a duty imposed by common2-18
law, statute, contract, license, protective order or other court or2-19
administrative order; and2-20
(f) Espionage through electronic or other means.2-21
2. "Misappropriation" means:2-22
(a) Acquisition of the trade secret of another by a person by improper2-23
means;2-24
(b) Acquisition of a trade secret of another by a person who knows or2-25
has reason to know that the trade secret was acquired by improper means;2-26
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(c) Disclosure or use of a trade secret of another without express or2-28
implied consent by a person who:2-29
(1) Used improper means to acquire knowledge of the trade secret;2-30
(2) At the time of disclosure or use, knew or had reason to know that2-31
his knowledge of the trade secret was:2-32
(I) Derived from or through a person who had used improper2-33
means to acquire it;2-34
(II) Acquired under circumstances giving rise to a duty to maintain2-35
its secrecy or limit its use; or2-36
(III) Derived from or through a person who owed a duty to the2-37
person seeking relief to maintain its secrecy or limit its use; or2-38
(3) Before a material change of his position, knew or had reason to2-39
know that it was a trade secret and that knowledge of it had been acquired2-40
by accident or mistake.2-41
3. "Owner" means the person who holds legal or equitable title to a2-42
trade secret.3-1
4. "Person" means a natural person, corporation, business trust, estate,3-2
trust, partnership, association, joint venture, government, governmental3-3
subdivision or agency, or any other legal or commercial entity.3-4
3-5
direct access to a computer database containing a trade secret.3-6
6. "Trade secret"3-7
(a) Means information, including , without limitation, a formula,3-8
pattern, compilation, program, device, method, technique3-9
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that:3-11
(1) Derives independent economic value,3-12
potential, from not being generally known to, and not being readily3-13
ascertainable by proper means by3-14
can obtain commercial or economic value from its disclosure or use; and3-15
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circumstances to maintain its secrecy.3-17
(b) May consist of a fact, item or procedure, or a series or sequence of3-18
items or procedures which, although individually could be perceived as3-19
relatively minor or simple, collectively make a substantial difference in3-20
the efficiency of a process or in the efficiency of the production of a3-21
product, or which may be the basis of a marketing or commercial3-22
strategy.3-23
Sec. 3. NRS 600A.040 is hereby amended to read as follows: 600A.040 1. Actual or threatened misappropriation may be enjoined.3-25
Upon application to the court, an injunction must be terminated when the3-26
trade secret has ceased to exist, but the injunction may be continued for an3-27
additional reasonable period of time3-28
other advantage that otherwise would be derived from the3-29
misappropriation.3-30
2. In exceptional circumstances, an injunction may condition future use3-31
upon payment of a reasonable royalty for no longer than the period of time3-32
for which use could have been prohibited. Exceptional circumstances3-33
include a material and prejudicial change of position before acquiring3-34
knowledge or reason to know of misappropriation that renders a prohibitive3-35
injunction inequitable.3-36
3. In appropriate circumstances, the court may order affirmative acts to3-37
protect a trade secret.3-38
Sec. 4. NRS 600A.050 is hereby amended to read as follows: 600A.050 1. Except to the extent that a material and prejudicial3-40
change of position before acquiring knowledge or reason to know of3-41
misappropriation renders a monetary recovery inequitable, a complainant is3-42
entitled to recover damages for misappropriation. Damages include both3-43
loss caused by misappropriation and unjust enrichment caused by4-1
misappropriation that is not taken into account in computing the loss. In4-2
lieu of damages measured by any other methods, damages caused by4-3
misappropriation may be measured by imposition of liability for a4-4
reasonable royalty for a misappropriator’s unauthorized disclosure or use of4-5
a trade secret.4-6
2. If willful4-7
disregard of the rights of the owner of the trade secret exists, the court4-8
may award exemplary damages in an amount not exceeding twice the award4-9
made under subsection 1.4-10
Sec. 5. NRS 600A.070 is hereby amended to read as follows: 600A.070 1. In4-12
the court shall preserve the secrecy of an alleged trade secret by reasonable4-13
means, which may include4-14
(a) Granting protective orders in connection with discovery proceedings4-15
4-16
(b) Holding hearings in camera4-17
(c) Sealing the records of the action4-18
(d) Determining if there is a substantial need for any information4-19
related to the trade secret before ordering discovery;4-20
(e) Limiting an order which authorizes real time discovery;4-21
(f) Ordering the party seeking to obtain information related to the4-22
trade secret to post an appropriate bond;4-23
(g) Allowing the owner of the trade secret to obtain a signed4-24
agreement of confidentiality from any party who obtains knowledge of4-25
the trade secret;4-26
(h) Ordering a person who obtains knowledge of the trade secret to4-27
return to the owner of the trade secret any writing which reflects or4-28
contains the trade secret; and4-29
(i) Ordering any person involved in the litigation not to disclose an4-30
alleged trade secret without previous court approval.4-31
2. As used in this section, "substantial need" means that:4-32
(a) The information sought is directly relevant to allegations in the4-33
initial pleading which set forth the facts constituting liability or a defense4-34
to liability and which are pleaded with particularity;4-35
(b) The party making the request for discovery will be substantially4-36
prejudiced if he is not allowed access to the information sought; and4-37
(c) The party making the request for discovery believes in good faith4-38
that the testimony based on or evidence derived from the information4-39
sought will be admissible at trial.4-40
Sec. 6. NRS 600A.090 is hereby amended to read as follows: 600A.090 1. Except as otherwise provided in subsection 2, this4-42
chapter displaces conflicting tort, restitutionary, and other law of this state4-43
providing civil remedies for misappropriation of a trade secret.5-1
2. This chapter does not affect:5-2
(a) Contractual remedies, whether or not based upon misappropriation5-3
of a trade secret;5-4
(b) Other civil remedies that are not based upon misappropriation of a5-5
trade secret; or5-6
(c)5-7
criminal sanctions, whether or not based upon misappropriation of a trade5-8
secret.5-9
Sec. 7. NRS 600A.020 is hereby repealed.
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TEXT OF REPEALED SECTION600A.020 Uniform application and construction. This chapter
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shall be applied and construed to effectuate its general purpose to make5-13
uniform the law with respect to the subject of this chapter among states5-14
enacting it.~