Trade Secrets Law in North Carolina

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

The North Carolina Trade Secrets Protection Act is located in chapter 66, article 24 of the North Carolina General Statutes. This Act is similar 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, The North Carolina Trade Secrets Protection Act prohibits "misappropriation" of trade secrets and provides certain remedies.

Definitions

N.C. Gen. Stat. § 66-152 defines the key terms of the Act:

(1)"Misappropriation" means acquisition, disclosure, or use of a trade secret of another without express or implied authority or consent, unless such trade secret was arrived at by independent development, reverse engineering, or was obtained from another person with a right to disclose the trade secret.

(2)"Person" means an individual, corporation, government, governmental subdivision or agency, business trust, estate, trust, partnership, association, joint venture, or any other legal or commercial entity.

(3)"Trade secret" means business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that:

a. Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and

b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Remedies

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

• Injunctive Relief: The Act 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 N.C. Gen. Stat. § 66-154. 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. If the court determines that the defendant acted willfully or maliciously, it may award the plaintiff punitive damages. See N.C. Gen. Stat. § 66-154.

• 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. See N.C. Gen. Stat. § 66-154.

Statute of Limitations

The statute of limitations for a trade secret claim in North Carolina is three years. See N.C. Gen. Stat. § 66-157