Elements of Nevada's Theories of Liability

Misappropriation of Trade Secrets

Misappropriation of Trade Secrets

Elements

A plaintiff must prove

  1. a valuable trade secret;
  2. misappropriation of the trade secret through use, disclosure, or nondisclosure of use of the trade secret; and
  3. the misappropriation is wrongful because it was made in breach of an express or implied contract or by a party with a duty not to disclose.

Frantz v. Johnson, 116 Nev. 455, 466, 999 P.2d 351, 358 (2000).

Kaldi v. Farmers Ins. Exchange, 117 Nev. 273, 283-84, 21 P.3d 16, 23 (2001).

See also Trade Secrets Uniform Act, which includes relevant definitions as well as criminal penalties and other relief. NRS 600A.

Example Cases

Factors to be considered in determining whether a corporate information is a trade secret include the following:

  1. the extent to which the information is known outside of the business and the ease or difficulty with which the acquired information could be properly acquired by others;
  2. whether the information was confidential or secret;
  3. the extent and manner in which the employer guarded the secrecy of the information; and
  4. the former employee’s knowledge of customer’s buying habits and other customer data and whether this information is known by the employer’s competitors.

Frantz v. Johnson, 116 Nev. 455, 467, 999 P.2d 351, 358-59 (2000).

Not every customer and pricing list will be protected as a trade secret.

Frantz v. Johnson, 116 Nev. 455, 467, 999 P.2d 351, 358-59 (2000) (citing Neal v. Griepentrog, 108 Nev. 660, 666, 837 P.2d 432, 435 (1992)).

Direct evidence of harm by competitors through unfair and illegal business tactics is not necessary; indirect circumstantial evidence is enough.

Frantz v. Johnson, 116 Nev. 455, 467, 999 P.2d 351, 358-59 (2000). Whitehead v. Nev. Com’n on Judicial Discipline, 110 Nev. 874, 904 n. 6, 878 P.2d 913, 932 (1994).

The plain language of NRS 600A.090 precludes a plaintiff from bringing a tort or restitutionary action “based upon” misappropriation of a trade secret beyond that provided by the UTSA. In interpreting NRS 600A.090, a federal district court has held that a plaintiff’s claims for unjust enrichment and unfair competition were precluded by the UTSA since these two claims were duplicative of plaintiff’s claim for misappropriation of trade secrets. A former employee’s use of confidential information or trade secrets of his employer in violation of a contractual or fiduciary duty is not protected by the First Amendment.

Frantz v. Johnson, 116 Nev. 455, 467, 999 P.2d 351, 358-59 (2000).

Misc.