Trade Secrets Law in Michigan

Note: This page covers information specific to Michigan. See the Trade Secrets overview for more general information.

The Michigan Uniform Trade Secrets Act ("MUTSA") is located in chapter 445 of the Michigan Compiled Laws. MUTSA is largely identical to the Uniform Trade Secrets Act. For generally applicable information on trade secrets claims and defenses, see Basics of a Trade Secret Claim and Publishing Trade Secrets.

Like the Uniform Trade Secret Act, MUTSA prohibits "misappropriation" of trade secrets and provides certain remedies.

Definitions

Mich. Comp. Laws § 445.1902 defines the key terms of MUTSA:

(a) “Improper means” includes theft, bribery, misrepresentation, breach, or inducement of a breach of a duty to maintain secrecy or espionage through electronic or any other means.

(b) “Misappropriation” means either of the following:

(i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means.

(ii) Disclosure or use of a trade secret of another without express or implied consent by a person who did 1 or more of the following:

(A) Used improper means to acquire knowledge of the trade secret.

(B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was derived from or through a person who had utilized improper means to acquire it, acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or derived from or through a person who owed a duty to the person to maintain its secrecy or limit its use.

(C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

(c) “Person” means an individual, corporation, partnership, association, governmental entity, or any other legal entity.

(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that is both of the following:

(i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

For generally applicable information on how a trade secrets claim works, see Basics of a Trade Secret Claim.

Remedies

If the court finds that a defendant has misappropriated a plaintiff's trade secret(s), it may impose the following remedies:

• Injunction: MUTSA empowers a court to order a defendant to stop violating the plaintiff's rights and to take steps to preserve the secrecy of the plaintiff's information. See Mich. Comp. Laws § 445.1903. Most importantly, this means that a court has the authority, as far as the law of trade secrets goes, to order you to stop publishing someone's trade secrets if it finds that your publication amounts to misappropriation. The First Amendment to the U.S. Constitution may limit the court's ability to do so, however. For details, see Publishing Trade Secrets.

• Damages: A court can make a defendant pay money damages to the plaintiff for the economic harm suffered as a result of a trade secret violation. This may include the plaintiff's losses resulting from the misappropriation and the defendant's profits derived from it. In lieu of those damages, a court can also order a losing defendant to pay a royalty to the trade secret owner. See Mich. Comp. Laws § 445.1904.

• Attorneys' Fees: If a plaintiff sues and wins, the court may award attorneys' fees if it finds that the defendant acted willfully or maliciously. On the other hand, if the defendant wins, the court may award attorneys' fees if it finds that the plaintiff acted in bad faith when filing the lawsuit. The court may also award attorneys' fees if a motion to terminate an injunction is made or resisted in bad faith. See Mich. Comp. Laws § 445.1905.

Statute of Limitations

The statute of limitations for a trade secret claim in Michigan is three years. See Mich. Comp. Laws § 445.1907.