Trade Secret Laws Pennsylvania

Ramesh, Vikram 6/21/2022
For Educational Use Only
Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227
Trade Secret Laws: Pennsylvania

by Anne E. Kane and Brian Wallen, Schnader Harrison Segal & Lewis LLP, with Practical Law
Labor & Employment
Law stated as of 16 Jul 2021 • Pennsylvania, United States
A Q&A guide to state law on trade secrets and confidentiality for private employers in
Pennsylvania. This Q&A addresses the state-specific definitions of trade secrets and the
legal requirements relating to protecting them. Federal, local, or municipal law may impose
additional or different requirements. Answers to questions can be compared across a
number of jurisdictions (see Trade Secret Laws: State Q&A Tool).
Overview of State Trade Secret Law

Definition of Trade Secret
Reasonable Efforts to Maintain Secrecy
Trade Secret Misappropriation Claims
Defenses
Statute of Limitations
Other Related Claims
Remedies
Contractual Protections
Miscellaneous
Overview of State Trade Secret Law
© 2022 Thomson Reuters. No claim to original U.S. Government Works. 1

1. List the laws (statutes and regulations) by name and code number, both
criminal and civil, that your state has adopted governing trade secrets.
Pennsylvania adopted the Pennsylvania Uniform Trade Secrets Act (PUTSA) on April 19,
2004 (12 Pa. C.S.A. §§ 5301 to 5308). It is often referred to as the PUTSA to distinguish
it from the model Uniform Trade Secrets Act.
Pennsylvania also has a criminal trade secret theft statute (18 Pa. C.S.A. § 3930).
Pennsylvania also criminalizes improper use or receipt of trade secrets (3 Pa. C.S.A. §§
5111(d) and 6723(b); 18 Pa. C.S.A. § 3930).
2. Has your state adopted the model Uniform Trade Secrets Act (UTSA)? If so,
please:
• Identify which among the statutes listed in response to Question 1 is your

state's adopted version of the UTSA.
• Describe any significant differences between your state's adopted version

and the model UTSA.
Adopted Version of Model UTSA
Pennsylvania has adopted the model Uniform Trade Secrets Act (UTSA), with slight
modification. It is referred to as the Pennsylvania Uniform Trade Secrets Act (PUTSA) (12
Pa. C.S.A. §§ 5301 to 5308). For an overview of the UTSA, see Practice Note, Protection
of Employers' Trade Secrets and Confidential Information: Trade Secrets.
Significant Differences Between Adopted Version and Model UTSA
The PUTSA largely tracks the UTSA's language, though it does expand the UTSA's trade
secret definition to specifically include customer lists and items of "potential value". Unlike
the UTSA, which does not define “willful and malicious", the PUTSA defines “willful and
malicious” to mean “such intentional acts or gross neglect of duty as to evince a reckless
indifference of the rights of others on the part of the wrongdoer, and an entire want of care

so as to raise the presumption that the person at fault is conscious of the consequences
of his carelessness.” (12 Pa. C.S.A. § 5302.)
The PUTSA treats continuing misappropriations as separate violations of law for statutes
of limitations purposes (12 Pa. C.S.A. § 5307; see Heraeus Medical GmbH v. Esschem,
Inc., 927 F.3d 727, 736-37 (3d Cir. 2019)). In comparison, the UTSA treats a continuing
misappropriation as a single claim for purposes of the statute of limitations (12 Pa. C.S.A.
§ 5307).
3. List any common law protections afforded to trade secrets. If common law
protections are afforded to trade secrets, are they preempted by available state
statutes?
The Pennsylvania Uniform Trade Secrets Act (PUTSA) displaces conflicting:
• Tort claims.
• Restitutionary claims.
• Pennsylvania law providing civil remedies for trade secret misappropriation.
(12 Pa. C.S.A. § 5308(a).)
However, the PUTSA does not affect certain remedies including:
• Contractual remedies, whether or not they are based on trade secret

misappropriation.
• Criminal remedies, whether or not they are based on trade secret misappropriation.
• Civil remedies that are not based on trade secret misappropriation.
(12 Pa. C.S.A. § 5308(b).)
For more information on Pennsylvania courts' approach to preemption of civil remedies

under the PUTSA, see Question 19.

Definition of Trade Secret
4. How does your state define a trade secret under each law identified in Question
1 (statute or regulation) and Question 3 (common law)?
The Pennsylvania Uniform Trade Secrets Act (PUTSA) defines a trade secret as
information:
• Including:
• a formula;
• a drawing;
• a pattern;
• a compilation including a customer list;
• a program;
• a device;
• a method;
• a technique; or
• a process.
• That derives actual or potential independent economic value because it is:
• not generally known by others who can gain economic value from its
disclosure or use; and

• not readily ascertainable by proper means by others who can gain economic
value from its disclosure or use.
• That is the subject of reasonable efforts under the circumstances to maintain its
secrecy.
(12 Pa. C.S.A. § 5302.)
Pennsylvania's criminal trade secrets theft statute defines a trade secret as all or any
portion of any:
• Scientific information.
• Technical information.
• Design.
• Process.
• Procedure.
• Formula.
• Improvement.
(18 Pa. C.S.A. § 3930(e).)
Further, under the criminal trade secret statute, information must be:
• Valuable.
• Specifically identified by the owner as confidential.
• Unpublished or not a matter of general public knowledge.
(18 Pa. C.S.A. § 3930(e).)
Pennsylvania's criminal trade secret statute creates a rebuttable presumption that scientific
or technical information is not public knowledge and has not been published if the owner

has taken measures to prevent it from becoming available to unauthorized persons (18
Pa. C.S.A. § 3930(e)).
5. Describe any significant cases in your state creating, modifying, or clarifying

the definition of a trade secret.
In Pennsylvania, the two crucial factors for determining whether particular information
constitutes a trade secret are:
• Substantial secrecy.
• Competitive value to the owner.
(Petco, Inc. v. Associated Products, Inc., 880 A.2d 700, 706 (Pa. Super. 2005); Brubaker
Kitchens, Inc. v. Brown, 2006 WL 1193223, at *1 (E.D. Pa. May 04, 2006) (analyzing
Pennsylvania law); Amerex Envntl. Techs., Inc. v. Foster, 2012 WL 6552828, at *5 (W.D.
Pa. Dec. 14, 2012) (analyzing Pennsylvania law).)
The Pennsylvania Uniform Trade Secrets Act (PUTSA) did not substantially alter the
definition of a trade secret, and Pennsylvania courts still refer to the six-factor common
law analysis in determining whether information constitutes a trade secret. The six factors
include:
• The extent to which the information is known outside of the business.
• The extent to which the information is known by employees and others in the
business.
• The extent of the employer's measures to guard the information's secrecy.
• The information's value to the employer and to competitors.
• The amount of effort or money spent to develop the information.
• How easy or difficult it would be for others to properly acquire or duplicate the
information.

Therefore, while the PUTSA has displaced Pennsylvania's common law for trade secret
misappropriation, the statute has not caused a substantive change in the definition of a
trade secret. (Iron Age Corp. v. Dvorak, 880 A.2d 657, 663 (Pa. Super. 2005); Youtie v.
Macy's Retail Holding, Inc., 626 F. Supp. 2d 511, 522 n.10 (E.D. Pa. 2009) (analyzing
Pennsylvania law).)
Pennsylvania courts do not define trade secrets to include any of a worker's:
• Aptitude.
• Skill.
• Dexterity.
• Manual and mental ability.
(Iron Age, 880 A.2d at 663.)
Further, trade secret protection is not available for information that merely summarizes the
industry connections of a principal and business founder because Pennsylvania law does
not extend trade secret status to a person's:
• Industry experience.
• Subjective knowledge of an industry.
(Brubaker Kitchens, 2006 WL 1193223, at *3.)
6. What are examples of information that courts in your state:
• Have found to be trade secrets?
• Have found not to be trade secrets?
• Have found not to be trade secrets as a matter of law?

Trade Secrets
Courts applying Pennsylvania law have found the following types of information to be trade
secrets under the circumstances present:
• Business information related to development, marketing, and sale of a product and

customer communications (Ideal Aerosmith, Inc. v. Acutronic USA, Inc., 2007 WL
4394447, at *8 (W.D. Pa. Dec. 13, 2007)).
• Customer lists (see Question 7).
• Manufacturing processes and recipes (Bimbo Bakeries USA, Inc. v. Botticella, 613
F.3d 102, 110 (3d Cir. 2010)).
• A corporation's long-term strategies, operating costs, and customer negotiations

(Bimbo, 613 F.3d at 113).
• Computer programs developed to achieve a specific result (Computer Print Sys.,

Inc. v. Lewis, 422 A.2d 148, 153 n.3 (Pa. Super. 1980)).
• A chemical product's formula (Harry Miller Corp. v. Mancuso Chems. Ltd., 469 F.
Supp. 2d 303, 311-12 (E.D. Pa. 2007)).
• The substance of unique incentive and rebate programs (EXL Labs., LLC v. Egolf,
2010 WL 5000835, at *5-6 (E.D. Pa., Dec. 7, 2010)).
• Pricing information for products and services (EXL Labs., 2010 WL 5000835, at
*5-6).
• An internet-based marketing tool (Home Line Furniture Indus., Inc. v. Banner Retail
Mktg., 630 F. Supp. 2d 527, 540-41 (E.D. Pa. 2009)).
• An employee's improvement to their employer's product (B & B Microscopes v.

Armogida, 532 F. Supp. 2d 744, 756 (W.D. Pa. 2007)).
Not Trade Secrets
Courts applying Pennsylvania law found the following types of information were not trade
secrets under the circumstances present:
• Client list information, including client names and telephone numbers, services
performed for the client, and prices charged, because the information was not

proprietary and was available from other sources (Brett Senior & Assocs. v.
Fitzgerald, 2007 WL 2043377, at *6 (E.D. Pa. Jul. 13, 2007)).
• Future business plans and expansion plans that were public knowledge (Select
Med. Corp. v. Hardaway, 2006 WL 859741, at *8 (E.D. Pa. Mar. 24, 2006)).
• A personal contacts list and a calendar that were maintained during employment
but lacked economic value (Fisher Bioservices, Inc. v. Bilcare, Inc., 2006 WL
1517382, at *16-17 (E.D. Pa. May 31, 2006)).
• A list with customer names and contact information that could be easily obtained
through other sources including industry-wide mailing lists or a phone book (Pestco,
Inc. v. Associated Prods., Inc., 880 A.2d 700, 707 (Pa. Super. 2005)).
• A pricing method that uses information a competitor could obtain using legitimate
means by someone with the appropriate skills (WMI Group, Inc. v. Fox, 109 A.3d
740, 753 (Pa. Super. 2015)).
Not Trade Secrets as a Matter of Law
In Project Development Group v. O.H. Materials Corp., the court denied summary
judgment, refusing to hold that, under Pennsylvania law, particular information was not a
trade secret as a matter of law even though the information was readily available in the
industry (766 F. Supp. 1348, 1355 (W.D. Pa. 1991)). The court explained that whether
particular information constitutes a trade secret is an issue of fact, which the fact finder
should resolve after a full presentation of the evidence (766 F. Supp. at 1355; see Bro-Tech
Corp. v. Thermax, Inc., 651 F. Supp. 2d 378, 410 (E.D. Pa. 2009) (analyzing Pennsylvania
law)).
7. To what extent have:
• Customer, client, or subscriber lists been given trade secret protection?
• Former employees been enjoined from using a former employer's

customer information?
Customer Lists Can Be Protected as Trade Secrets

In Pennsylvania, courts determine whether confidential customer lists are a trade secret
on a case-by-case basis (O.D. Anderson, Inc., v. Cricks, 815 A.2d 1063, 1071 (Pa. Super.
2003); Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233, 1245 (Pa. Super. 2011)).
Not all customer data qualifies for trade secret protection. Pennsylvania courts focus on the
value of the customer list, asking whether the list represents a permanent and exclusive
relationship between customers and the company (MCQ's Enters., Inc. v. Philadelphia
Parking Auth., 2007 WL 127728, at *6 (E.D. Pa. Jan. 11, 2007) (analyzing Pennsylvania
law)). In Pennsylvania, a customer list may constitute a trade secret where:
• The list represents a material investment of the time and money of the business.
• There are permanent and exclusive relationships between customers and

salespersons.
(Alturnamats, Inc. v. Harry, 2008 WL 4279814, at *9-10 (W.D. Pa. Sep. 16, 2008) (analyzing
Pennsylvania law).)
Generally, customer lists are denied protection if they are easily generated from:
• Trade journals.
• Ordinary telephone listings.
• An employee's general knowledge of who, in an established industry, is a potential

customer for a given product.
(Alturnamats, 2008 WL 4279814, at *11.)
The Alturnamats court protected a customer list where:
• The customer list was developed over many years through significant efforts.
• The employer viewed the list as highly proprietary and took great pains to protect it.
• The employee handbook indicated that all customer information belonged to the
employer.
• The list could not be removed from the premises without permission.
(Alturnamats, 2008 WL 4279814, at *11.)

By contrast, the Alturnamats court discussed a case from before the adoption of the
Pennsylvania Uniform Trade Secrets Act where the Pennsylvania Supreme Court refused
to protect a customer list where the customer's identities were easily ascertainable with
minimal effort and at nominal expense (Alturnamats, 2008 WL 4279814, at *11 (citing Carl
A. Colteryahn Dairy, Inc. v. Schneider Dairy, 203 A.2d 469 (Pa. 1964)).
Reasonable Efforts to Maintain Secrecy
8. What efforts to maintain secrecy have been deemed reasonable or sufficient

for trade secret protection by:
• Courts in your state?
• Statutes or regulations in your state?
Courts
Pennsylvania case law before the adoption of the Pennsylvania Uniform Trade Secrets
Act (PUTSA) remains relevant in determining what efforts to maintain secrecy have
been deemed reasonable. Before the PUTSA's adoption in 2004, Pennsylvania courts
traditionally used six factors to determine whether information constitutes a trade secret
(see Question 5). Since adoption of the PUTSA, Pennsylvania courts continue to refer to
these factors (Iron Age, 880 A.2d at 663). One of the common law factors evaluates the
extent of the employer's measures to guard the secrecy of the trade secret information,
which is mirrored by the PUTSA's requirement of making reasonable efforts to keep
information secret (12 Pa. C.S.A. § 5302).
Construing the PUTSA, a federal court analyzing Pennsylvania law found that an employer
made reasonable efforts to protect the secrecy of specialized computer software where:
• The employer purchased hardware against software piracy (HASP) keys which,
when properly installed, prevent reverse engineering.
• The employer arranged to have the HASP keys sent to the defendant employee for
installation.

• The employer reasonably believed that the HASP keys had been installed.
• There was evidence that the employee knew that their employer owned the
software and it should be treated as a trade secret.
(B & B Microscopes, 532 F. Supp. 2d at 756.)
A federal court also found that a manufacturer made reasonable efforts under
Pennsylvania law to protect the secrecy of its unique web-based marketing strategy
information where:
• The manufacturer required a marketing group to sign a confidentiality agreement

before the manufacturer agreed to disclose the information.
• The manufacturer required the marketing group to sign a second confidentiality

agreement to protect its rights under the first agreement, after the marketing
employee who signed the first agreement departed.
• The marketing group did not object to signing either agreement.
• The confidentiality agreement covered all of the information the manufacturer

revealed to the marketing business.
(Home Line Furniture, 630 F. Supp. 2d at 531-32.)
However, confidentiality agreements are not necessary in Pennsylvania to show

reasonable efforts if the plaintiff took other, sufficient precautions to preserve the
information's secrecy (EXL Labs., 2010 WL 5000835, at *6 (citing Swift Bros. v. Swift &
Sons, Inc., 921 F. Supp. 267 (E.D. Pa. 1995) (analyzing Pennsylvania law)).
A tour company's customer list, containing valuable information about each customer's
travel frequency and destinations, was adequately secured when:
• The company restricted access to the lists.
• The lists were password-protected.
• The company immediately demanded return of their lists from departing employees.
(O.D. Anderson, 815 A.2d at 1071.)

Similarly, information concerning insurance policies, policy expiration dates, and

customers was adequately protected where:
• The employer limited access to the information to particular employees.
• The employee handbook identified the information as the employer's property.
• The employee handbook had a confidentiality provision prohibiting employees from

disclosing the information to outsiders.
• The information was password protected.
• The information was never shared with competitors.
(A.M. Skier Agency, Inc. v. Gold, 747 A.2d 936, 940-41 (Pa. Super. 2000).)
A candy manufacturer adequately protected a recipe's secrecy where:
• It maintained only one written copy of the recipe which it stored off the premises.
• The employees only learned the part of recipe relevant to their manufacturing
duties.
• The manufacturer only revealed the entire recipe to a few key employees.
(Christopher M's Hand Poured Fudge, Inc. v. Hennon, 699 A.2d 1272, 1275 (Pa. Super.
1999).)
Statutes or Regulations
There are no statutes or regulations addressing what are considered reasonable steps to
maintain secrecy of a trade secret.
Trade Secret Misappropriation Claims
9. For any law identified in Question 1 (statutes or regulations) or Question 3

(common law), what must a plaintiff show to prove trade secret misappropriation?

Analyzing the Pennsylvania Uniform Trade Secrets Act (PUTSA), the US Court of Appeals
for the Third Circuit summarized the requirements to prove trade secret misappropriation
(Bimbo, 613 F.3d at 109). Trade secret misappropriation occurs when a person:
• Acquires knowledge of another's trade secret.
• Acquires the trade secret under circumstances giving rise to a duty to maintain its
confidentiality.
• Discloses or uses the trade secret without the owner's consent.
(Bimbo, 613 F.3d at 110.)
The PUTSA defines misappropriation in three different ways:
• Acquisition.
• Disclosure.
• Use.
(12 Pa. C.S.A. § 5302.)
Acquisition as Misuse
A trade secret can be misappropriated where the acquirer knew or had reason to know that
the trade secret was acquired by improper means (see Question 9: Definition of Improper
Means) (12 Pa. C.S.A. § 5302).
Disclosure or Use of Trade Secret as Misuse
Disclosure or use of another's trade secret without express or implied consent can be
misappropriation where the person:
• Used improper means to acquire knowledge of the trade secret.

• At the time of disclosure or use, knew or had reason to know that the trade secret
was:
• derived from a person who used improper means to acquire it;
• acquired under circumstances giving rise to a duty to maintain its secrecy or

limit its use; or
• derived from a person who owed a duty to maintain its secrecy or limit its use.
• Before a material change of position, knew or had reason to know that:
• the information was a trade secret; and
• knowledge of the information had been acquired by accident or mistake.
(12 Pa. C.S.A. § 5302.)
Definition of Improper Means
Improper means include, but are not limited to:
• Theft.
• Bribery.
• Misrepresentation.
• Breach or inducement of a breach of a duty to maintain secrecy.
• Espionage through electronic or other means.
(12 Pa. C.S.A. § 5302.)
10. Can corporations, corporate officers, and employees of a competing

company in possession of the trade secrets of others be held liable for
misappropriation in your state? If so, under what circumstances?

Under the Pennsylvania Uniform Trade Secrets Act (PUTSA) any person may be held
liable for trade secret misappropriation. The PUTSA defines a person to include:
• A natural person.
• A corporation.
• A partnership.
• A joint venture.
• An association.
• A trust.
• A business trust.
• An estate.
• A government, governmental subdivision, or agency.
• Any other legal or commercial entity.
(12 Pa. C.S.A. § 5302.)
The elements listed in Question 9 are necessary to prove misappropriation of the trade
secret against both individuals and commercial entities.
Defenses
11. For any law identified in Question 1 (statutes and regulations) or Question 3
(common law), what defenses are available to defend against claims under the
statute or common law?

Under Pennsylvania law, defenses to a misappropriation of trade secrets claim include:
• The information is not a trade secret (see Question 3).
• There was no misappropriation (see Question 9).
• The three-year statute of limitations expired (12 Pa. C.S.A. § 5307).
• Lack of standing to sue.
• Failure to make reasonable efforts to protect the trade secret (see Question 8).
• That damages are inequitable because of a material and prejudicial change of

position before acquiring knowledge or reason to know of misappropriation (12 Pa.
C.S.A. § 5304(a)).
Pennsylvania's criminal trade secret theft statute provides a complete defense where the
defendant demonstrates that the trade secret information was either:
• Rightfully known.
• Available from a source other than the trade secret owner.
(18 Pa. C.S.A. § 3930(d).)
Statute of Limitations
12. For any law identified in Question 1 (statutes and regulations) or Question
3 (common law), please identify the relevant statute of limitations for bringing a
claim.

Pennsylvania law provides a three-year statute of limitations for a misappropriation of

trade secrets claim. However, the limitations period does not start running until either the
misappropriation:
• Is discovered.
• Should have been discovered with the exercise of reasonable diligence.
(12 Pa. C.S.A. § 5307.)
Under Pennsylvania's criminal trade secret theft statute, the statute of limitations for
bringing a prosecution is five years (18 Pa. C.S.A. § 3930(a), (b); 42 Pa. C.S.A. § 5552(b)
(1)). The statute of limitations accrues for criminal prosecutions the day after the crime is
committed (42 Pa. C.S.A. § 5552(d)).
Other Related Claims
13. What other claims, statutory or common law, can a plaintiff bring in your state
against a defendant in the event of wrongful acquisition, misuse, or disclosure
of a trade secret?
In addition to a claim under the Pennsylvania Uniform Trade Secrets Act (PUTSA), a
plaintiff can also remedy wrongful acquisition, misuse, or disclosure of a trade secret with
claims for:
• Contractual remedies, whether or not based on trade secret misappropriation.
• Criminal remedies, whether or not based on trade secret misappropriation.
• Other civil remedies that are not based on trade secret misappropriation.
(12 Pa. C.S.A. § 5308.)
For more information on Pennsylvania courts' approach to preemption of civil remedies

under the PUTSA, see Question 19.

Remedies
14. For any law identified in Question 1 (statutes and regulations) and Question
3 (common law), please describe the potential relief available to plaintiffs.
Under the Pennsylvania Uniform Trade Secrets Act (PUTSA), potential relief may include:
• Monetary damages. Unless a monetary recovery is inequitable, a plaintiff is

entitled to damages for trade secret misappropriation. Monetary damages may
include both the actual loss and unjust enrichment caused by misappropriation.
A monetary recovery may be inequitable if the defendant has a material and
prejudicial change of position before acquiring knowledge or reason to know of
misappropriation. (12 Pa. C.S.A. § 5304(a).)
• Exemplary damages. If willful and malicious misappropriation exists, the court may
award exemplary damages of no more than twice the monetary damages awarded
(12 Pa. C.S.A. § 5304(b)).
• Attorneys' fees. A court may award the prevailing party reasonable attorneys' fees
if:
• a misappropriation claim is made in bad faith;
• a motion to terminate an injunction is made or resisted in bad faith; or
• willful and malicious misappropriation exists.
(12 Pa. C.S.A. § 5305.)
• A reasonable royalty. Damages may be measured by a reasonable royalty (12 Pa.

C.S.A. § 5304(a)).
• Affirmative acts. In appropriate circumstances, a court may order affirmative acts

to protect a trade secret (12 Pa. C.S.A. § 5303(c)).

• Injunctive relief. Actual or threatened misappropriation may be enjoined. On

application to the court, an injunction is terminated when the trade secret no longer
exists. However, the injunction may be continued for an additional reasonable
period of time to eliminate commercial advantage that otherwise would be derived
from the misappropriation. (12 Pa. C.S.A. § 5303(a).) The PUTSA states that,
in exceptional circumstances, an injunction may condition a defendant's future
use of a trade secret on payment of a reasonable royalty. These payments may
only last as long as the plaintiff could prohibit the defendant's use. Exceptional
circumstances include, but are not limited to, a material and prejudicial change of
position before acquiring the knowledge or reason to know of misappropriation that
renders a prohibitive injunction inequitable. (12 Pa. C.S.A. § 5303(b).)
A conviction for violating Pennsylvania's criminal trade secret theft statute may result in
incarceration (see Said v. Donate, 2008 WL 5246035, at *2 (E.D. Pa. Dec. 15, 2008)).
Contractual Protections
15. What factors do courts in your state consider when assessing the
enforceability of a nondisclosure or confidentiality agreement?
Under Pennsylvania law, a non-compete covenant is enforceable if it meets the following

requirements:
• It is incident to the parties' employment relationship.
• The restrictions imposed by the covenant are reasonably necessary for the
employer's protection.
• The restrictions are reasonably limited in duration and geographic extent.
(Quaker Chem. Corp. v. Varga, 509 F. Supp. 2d 469, 476 (E.D. Pa. 2007).)
To be reasonably necessary for an employer's protection, the non-compete covenant must

be tailored to protect legitimate interests (Quaker, 509 F. Supp. 2d at 478). Generally, the
types of interests that can be protected through a covenant include:

• Trade secrets.
• Confidential information.
• Good will.
• Unique or extraordinary skills.
• Not allowing a competitor to profit from a former employee's specialized training

and skills.
(Quaker, 509 F. Supp. 2d at 478.)
The employee bears the burden of demonstrating that a non-compete covenant is

unreasonable (Quaker, 509 F. Supp. 2d at 476).
In contrast to non-compete covenants, nondisclosure agreements that protect a company's

confidential information are not limited by the reasonableness criteria applicable to a
restrictive covenant. Therefore, courts generally enforce these agreements if they:
• Are not non-compete agreements.
• Only restrict the use of confidential information.
(See Alturnamats, 2008 WL 4279814, at *3.)
For more information on non-compete agreements in Pennsylvania, see State Q&A, Non-
Compete Laws: Pennsylvania.
In Pennsylvania, nondisclosure or confidentiality agreements may protect confidential

information that does not qualify as a trade secret (Den-Tal-Ez, Inc. v. Siemans Capital
Corp., 566 A.2d 1214, 1224 (Pa. Super. 1989)). A confidentiality agreement may be the
only form of protection for confidential information that does not rise to the level of a trade
secret (Den-Tal-Ez, 566 A.2d at 1224; Iron Age, 880 A.2d at 664).
Miscellaneous

16. What common law duties are recognized in your state that prohibit employees
from disclosing employer information even absent an independent contractual
obligation?
In Pennsylvania, agents owe their principals a duty of loyalty. Pennsylvania has adopted
various sections of the Restatement (Second) of Agency. Under the Restatement, an
agent is subject to a duty not to use or communicate information confidentially given by
the principal or acquired during the agency, unless the information is general knowledge.
Agents are under a duty not to use or communicate this information to either compete with
or otherwise injure their principals. (Tan-Line Sun Studios, Inc. v. Bradley, 1986 WL 3764,
at *9-10 (E.D. Pa. Mar. 25, 1986).)
Employees in Pennsylvania also owe their employers a fiduciary duty of loyalty. To prevail
on a claim of breach of the duty of loyalty, an employer must prove that, in all matters
related to their employment, its employee negligently or intentionally failed to act both in:
• In good faith.
• Solely for the employer's benefit.
Under this duty, an employee may not use their employer's trade secrets while making
preparations to leave or otherwise engage in conduct that damages the employer.
(Latuszewski v. Valic Fin. Advisors, Inc., 2007 WL 4462739, at *18 (W.D. Pa. Dec. 19,
2007).)
For more information on preemption issues in Pennsylvania related to breach of fiduciary

duty and duty of loyalty claims, see Question 19.
17. Does your state recognize the doctrine of inevitable disclosure?
The Pennsylvania Uniform Trade Secrets Act (PUTSA) explicitly states that actual or
threatened misappropriation may be enjoined (12 Pa. C.S.A. § 5303(a)). In cases
of threatened trade secret misappropriation, Pennsylvania courts apply the inevitable
disclosure doctrine (Bimbo, 613 F.3d at 110-11) (analyzing Pennsylvania law)).

Whether, and to what extent, to grant injunctive relief in a trade secrets case depends
on a highly fact-specific inquiry. A court may enjoin a defendant from beginning new
employment if the facts of the case demonstrate a substantial threat of trade secret
misappropriation. (Bimbo, 613 F.3d at 113.) Specifically, Pennsylvania courts affirmed a
preliminary injunction against a former high-level employee who had access to their
former employer's trade secrets, enjoining them from working for a competitor to the
extent that their proposed employment threatened to lead to trade secret misappropriation
(Bimbo, 613 F.3d at 113-14).
By contrast, in Colorcon Inc. v. Lewis, the court denied a former employer's request
for injunctive relief under the PUTSA because the employer was unlikely to succeed
in demonstrating that its former employee's new job was likely to result in trade secret
disclosure. Some of the factors the Colorcon court relied on were:
• The former employee credibly stated that they did not recall the trade secret
formulas.
• The former employee's new employer took steps to ensure that disclosure would
not occur.
• The former employee was not a high-level executive.
• There was no evidence the former employee was privy to executive-level decision-
making.
• There was no credible evidence showing the former employee took copies of
confidential materials.
• There was no indication that the former employee intended to use their former
employer's trade secrets at their new job.
(Colorcon Inc. v. Lewis, 792 F. Supp. 2d 786, 803-04 (E.D. Pa. May 31, 2011) (analyzing
Pennsylvania law).)
For general information on the inevitable disclosure doctrine, see Practice Note, Non-
Compete Agreements with Employees: Protection in the Absence of Non-Competes:
Inevitable Disclosure.
18. What, if anything, have courts held regarding trade secret misappropriation
claims involving memorizing trade secrets rather than the taking of tangible
representations of information?

In a case applying the common law, the Pennsylvania Supreme Court stated that trade
secret information concerning customers was entitled to protection regardless of whether
the information was in a written list or committed to memory (Morgan's Home Equip. Corp.
v. Martucci, 136 A.2d 838, 843 (Pa. 1957)).
More recently, a federal court analyzing Pennsylvania law explained in dicta that an
employee's nondisclosure agreement with their employer prevented them from disclosing
confidential information or trade secrets to their employer's competitor, whether they had
copied the information to a storage device or memorized it (Quaker, 509 F. Supp. 2d at
483-84).
19. Do any of the laws identified in Question 1 (statutes and regulations) or

Question 3 (common law) preempt other causes of action a plaintiff could assert
related to trade secret misappropriation (for example, conversion, breach of
fiduciary duty, unfair competition, or tortious interference)?
Significantly, for purposes of pleadings, Pennsylvania courts do not interpret the

Pennsylvania Uniform Trade Secrets Act to preempt common law tort claims before the
court has determined whether the information at issue is a trade secret.
One federal court analyzing Pennsylvania law denied a motion to dismiss a conversion
claim, reasoning that to preempt the claim at that stage could potentially leave the plaintiff
with no remedy if the information at issue was later found to be stolen, but not a trade
secret (Cenveo Corp. v. Slater, 2007 WL 527720, at *3-5 (E.D. Pa. Feb. 12, 2007)). Another
court used similar reasoning to deny a motion to dismiss claims of breach of fiduciary duty,
breach of duty of loyalty, unjust enrichment, and unfair competition (Youtie, 626 F. Supp.
2d at 521-23) (analyzing Pennsylvania law)).
A party's claims based not on allegations of trade secret misappropriation but instead
based on allegations of separate wrongdoing survived a motion to dismiss based on
preemption (Weiss v. Fiber Optic Designs, Inc., 2007 WL 3342605, at *1 (E.D. Pa. Nov.
9, 2007) (analyzing Pennsylvania law)).
In essence, the Weiss court refused to dismiss the claims because it would require the
court to determine too early in the litigation that trade secrets existed and that they were
misappropriated. The claims surviving the motion to dismiss were:

• Breach of the duty of loyalty.
• Tortious interference with existing and prospective business advantage.
• Unfair competition.
(Weiss, 2007 WL 3342605, at *1.)

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Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

Trade Secret Laws: Pennsylvania

Law stated as of 16 Jul 2021 • Pennsylvania, United States

Overview of State Trade Secret Law

Overview of State Trade Secret Law

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 1

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

• Identify which among the statutes listed in response to Question 1 is your

• Describe any significant differences between your state's adopted version

Adopted Version of Model UTSA

Significant Differences Between Adopted Version and Model UTSA

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 2

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

The Pennsylvania Uniform Trade Secrets Act (PUTSA) displaces conflicting:

• Pennsylvania law providing civil remedies for trade secret misappropriation.

(12 Pa. C.S.A. § 5308(a).)

However, the PUTSA does not affect certain remedies including:

• Contractual remedies, whether or not they are based on trade secret

• Civil remedies that are not based on trade secret misappropriation.

(12 Pa. C.S.A. § 5308(b).)

For more information on Pennsylvania courts' approach to preemption of civil remedies

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 3

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

Definition of Trade Secret

• a compilation including a customer list;

• That derives actual or potential independent economic value because it is:

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 4

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

(12 Pa. C.S.A. § 5302.)

(18 Pa. C.S.A. § 3930(e).)

• Specifically identified by the owner as confidential.

• Unpublished or not a matter of general public knowledge.

(18 Pa. C.S.A. § 3930(e).)

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 5

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

5. Describe any significant cases in your state creating, modifying, or clarifying

• Competitive value to the owner.

• The extent to which the information is known outside of the business.

• The extent of the employer's measures to guard the information's secrecy.

• The information's value to the employer and to competitors.

• The amount of effort or money spent to develop the information.

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 6

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

Pennsylvania courts do not define trade secrets to include any of a worker's:

• Manual and mental ability.

(Iron Age, 880 A.2d at 663.)

• Subjective knowledge of an industry.

(Brubaker Kitchens, 2006 WL 1193223, at *3.)

6. What are examples of information that courts in your state:

• Have found to be trade secrets?

• Have found not to be trade secrets?

• Have found not to be trade secrets as a matter of law?

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 7

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227

• Business information related to development, marketing, and sale of a product and

• Customer lists (see Question 7).

• A corporation's long-term strategies, operating costs, and customer negotiations

• Computer programs developed to achieve a specific result (Computer Print Sys.,

• An employee's improvement to their employer's product (B & B Microscopes v.

Not Trade Secrets

© 2022 Thomson Reuters. No claim to original U.S. Government Works. 8

Trade Secret Laws: Pennsylvania, Practical Law State Q&A 9-508-2227