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The law protecting trade secrets in Pennsylvania is about to become a whole lot clearer. Last week, the state Legislature unanimously approved legislation modeled after the Uniform Trade Secrets Act, and Gov. Edward G. Rendell’s office expects him to sign it this week. It’s been a long time coming, intellectual property lawyers say. Until last week, Pennsylvania was one of six states in the country without a chapter in the codebook based on the Uniform Act, which was published 25 years ago. Instead, trade secrets in Pennsylvania were protected by the common law — an inconsistent and unpredictable way of doing things, IP lawyers said. The Pennsylvania legislation, which defines trade secrets and how exactly it’s illegal to steal them, was first introduced in the General Assembly eight years ago. But over the years, the bills were always shuffled to a committee, never to emerge again, legislators and lobbyists said. In 1997, leaders of the Pennsylvania Bar Association’s intellectual property section got involved, urging legislators to sponsor and push the bill through the General Assembly. “We thought this was an important issue,” said Barry L. Cohn, a partner at Thorp Reed & Armstrong who used to chair the IP section. Last year, the PBA lobbyists tried a different tack in their approach of the Legislature, tapping a different legislative sponsor, state Sen. Charles W. Dent, and introducing the bill in both houses’ judiciary committee instead of the commerce committee. “This session we made the determination that we would pester people and try to keep it from dying in committee again,” said Carmen Santa Maria, an attorney at McNees Wallace & Nurick in Harrisburg who currently chairs the IP committee. “We were able to make sure that didn’t happen again.” Dent, an Allentown Republican, said he didn’t know why it took eight years to pass the legislation. “Sometimes bills just don’t move as quickly as you would like,” he said. “This type of statute was necessary for the protection of everyone. We needed a model statute.” IP lawyers said they hoped the legislation’s enactment would attract multistate technology companies to Pennsylvania now that the state has brought its trade secrets law in line with that of 44 other states. “Under the common law, there were too many variables in play to make Pennsylvania a good forum for bringing a trade secret action,” Cohn said. “You need to have consistency in the law.” Steve Driscoll, an IP attorney at Synnestvedt & Lechner, said that the changes to an attorney’s practice under the Uniform Act would not be drastic. The biggest “change” would be the new consistency, he said, which could make cases more user-friendly for attorneys and judges — as well as businesses that want to protect their sensitive information. “It’s one of these cases where consistency is the most important thing,” said Driscoll, who chairs the IP subcommittee of the Philadelphia Bar Association’s business law section. “The law needs to be applied consistently. It will reduce forum-shopping and increase the fairness in the way this area of law is enforced.” Under the Uniform Act’s definition, a trade secret is information having “independent economic value” by virtue of the fact that it is not public information and that it’s not readily attainable. (That is, it’s secret.) Unlike the pursuit of a patent, which requires making a product or device public in order to protect if from competitors, the motive behind protecting trade secrets is keeping them from the marketplace. Trade secrets, according to the legislation, can be client lists, customer lists, patterns, processes, methods, devices or formulas (like the famously vaulted Coca-Cola formula). The bill, passed on Wednesday, provides a civil remedy for when a trade secret is “misappropriated” — stolen or leaked — from a person or business that had taken steps to protect the secret. The legislation lays out the measures for determining injunctive relief and monetary damages, as well as punitive damages if malicious conduct can be proved. Pennsylvania already has a statute making it a crime to steal trade secrets. The Uniform Act provides the basis for a civil tort. “You want to make sure your trade secret is safe,” Santa Maria said. At Synnestvedt & Lechner, an IP boutique, attorneys mention the option of protecting clients’ sensitive information in the form of trade secrets only as an ancillary issue, Driscoll said. “If it’s an option, we usually attack a sensitivity problem with a patent — but that’s not always the best answer,” Driscoll said. “If you can, you want to use a patent whenever you can because it’s not contingent on someone keeping a secret like a trade secret is.” The National Conference of Commissioners on Uniform State Laws looked into codifying the common law protecting trade secrets when the technology boom was heating up in the 1970s, said John McCabe, legal counsel to the National Conference in Chicago. “We were heading into a technological world,” McCabe said. “Silicon Valley was well entrenched geographically as well as symbolically, and it was pretty clear that trade secrets would be an important element of intellectual property law. That’s proven to be true.” Legislators in New York and Massachusetts introduced bills proposing adoption of the Uniform Trade Secrets Act during their 2003-04 sessions, but both drafts are sitting in committees. New Jersey, Texas and Wyoming are the other states that haven’t adopted the model law, according to the National Conference. “It’s not uncommon to have uniform acts go out and be adopted by 40 or more states, and then we wait a while for the last 10 or so,” McCabe said. McCabe noted that the Uniform Trade Secrets Act does not legislate in the area of contract law. Businesses sometimes take the preventative measure of requiring employees to sign non-disclosure or non-competition agreements to ensure that they won’t publicize the businesses’ trade secrets or take the sensitive material to a competitor when they leave a job. Tim Ryan of Eckert Seamans Cherin & Mellott in Pittsburgh said that Pennsylvania already has a well-developed law in the area of these contract agreements. “It’s a serious concern in enforcing trade secrets that cost a lot of money to develop and protect,” Ryan said. The legislation approved last week was Senate Bill No. 152.

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