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Protecting business secrets in New Jersey

On Behalf of | Jan 27, 2023 | Business Litigation

Almost every business in Atlantic City or Cape May has information that it does not wish to be disclosed to competitors. This information can be as routine as customer lists or accounts receivable or as complex as the formula for a drug or the design for a unique technical device. Protecting the confidentiality of this information can be very important to the future of the business. The New Jersey Legislature has made such protection much easier with the passage of the Trade Secrets Act in 2012. The law has seen numerous amendments, but its central purpose remains the same.

What is a trade secret?

The statute creates a very broad definition of trade secret: information that is not generally known that bestows economic benefit on its owners. The secret information must afford its owner some type of competitive edge by virtue of its secrecy, or it will not be protected by the act.


The Trade Secrets Act affords the owner of a secret a number of remedies against anyone who has misappropriated confidential information. The most immediate remedy is an injunction against use of the information. The court can order the party who misappropriated the secret to pay a reasonable royalty to the secret’s owner in the future if disclosure of the information will have a negative financial impact on the revenue of the original owner. The owner of the secret may recover damages for any loss caused by the misappropriation of the information.

Other means of protecting information

While the NJTSA provides several effective means of protecting trade and business secrets, employers should take other steps. Asking all employees to sign non-disclosure agreements can be very effective, especially because the non-disclosure agreement can provide its own definition of secret or confidential information and can prescribe penalties for misappropriation that reach beyond the NJTSA. Also, the employer can take steps to restrict employees’ access to confidential and secret information while at work.

Protecting your business’s secrets

Protecting business secrets can be distracting and expensive. A small business that wants to protect its future may wish to consult an attorney who is knowledgeable about protecting business secrets.