Senate Bill No. 50–Committee on Judiciary

Prefiled January 24, 2001

(On Behalf of Encouraging Businesses to Organize and
Conduct Business in Nevada (SCR 19))

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Referred to Committee on Commerce and Labor

SUMMARY—Revises provisions governing trade secrets. (BDR 52‑257)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

AN ACT relating to trade secrets; providing that a trade secret which is misappropriated and posted on the Internet remains a trade secret under certain circumstances; authorizing a court to issue an order or injunction requiring the immediate removal of a misappropriated trade secret from the Internet; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 600A of NRS is hereby amended by adding

1-2 thereto a new section to read as follows:

1-3 A trade secret that is misappropriated and posted, displayed or

1-4 otherwise disseminated on the Internet shall be deemed to remain a trade

1-5 secret as defined in NRS 600A.030 and not to have “ceased to exist” for

1-6 the purposes of subsection 1 of NRS 600A.040 if:

1-7 1. The owner, within a reasonable time after discovering that the

1-8 trade secret has been misappropriated and posted, displayed or otherwise

1-9 disseminated on the Internet, obtains an injunction or order issued by a

1-10 court requiring that the trade secret be removed from the Internet; and

1-11 2. The trade secret is removed from the Internet within a reasonable

1-12 time after the injunction or order requiring removal of the trade secret is

1-13 issued by the court.

1-14 Sec. 2. NRS 600A.040 is hereby amended to read as follows:

1-15 600A.040 1. Actual or threatened misappropriation may be enjoined.

1-16 Upon application to the court, an injunction must be terminated when the

1-17 trade secret has ceased to exist, but the injunction may be continued for an

2-1 additional reasonable period of time to eliminate commercial or other

2-2 advantage that otherwise would be derived from the misappropriation.

2-3 2. In exceptional circumstances, an injunction may condition future

2-4 use upon payment of a reasonable royalty for no longer than the period of

2-5 time for which use could have been prohibited. Exceptional circumstances

2-6 include a material and prejudicial change of position before acquiring

2-7 knowledge or reason to know of misappropriation that renders a prohibitive

2-8 injunction inequitable.

2-9 3. In appropriate circumstances, the court may order affirmative acts to

2-10 protect a trade secret. As used in this subsection, “affirmative acts”

2-11 includes, without limitation, issuing an injunction or order requiring that

2-12 a trade secret which has been misappropriated and posted, displayed or

2-13 otherwise disseminated on the Internet be removed from the Internet

2-14 immediately.

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