Mississippi adopted the Uniform Trade Secrets Act (UTSA), codified at Miss. Code Ann. § 75-26-1 et seq., providing a statutory framework for the protection of confidential business information. Trade secrets are often the most valuable intellectual property a business possesses—customer lists, pricing algorithms, manufacturing processes, supplier relationships, and proprietary formulas—yet they are the form of IP most vulnerable to theft, precisely because they depend on secrecy rather than registration for their protection.
What Qualifies as a Trade Secret in Mississippi?
Under the Mississippi UTSA, a trade secret is information that derives independent economic value from not being generally known to or readily ascertainable by other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The definition is deliberately broad and includes formulas, patterns, compilations, programs, devices, methods, techniques, and processes.[1]
Two elements are critical. First, the information must have independent economic value because of its secrecy. A customer list that took years to develop and that gives the business a competitive advantage satisfies this element. A publicly available directory does not. Second, the owner must take reasonable steps to protect the secrecy of the information. What is "reasonable" depends on the circumstances, but typically includes measures such as non-disclosure agreements, access restrictions, password protection, employee training, and marking documents as confidential.
Misappropriation
Misappropriation occurs when a trade secret is acquired by improper means (such as theft, bribery, or breach of a duty of confidentiality) or is disclosed or used by a person who knows or should know that the information was obtained through improper means. Reverse engineering and independent development are not improper means—if a competitor independently discovers the same information through legitimate means, there is no misappropriation.[2]
The most common trade secret misappropriation scenario in practice involves a departing employee who takes confidential information to a competitor. The employee may copy files, download databases, forward emails to a personal account, or simply memorize key information. Whether this conduct constitutes misappropriation depends on the nature of the information, the employee's obligations (contractual and fiduciary), and the steps the employer took to protect the information.
Available Remedies
The Mississippi UTSA provides several remedies for misappropriation. Injunctive relief is available to prevent actual or threatened misappropriation, and the injunction may continue for the period necessary to eliminate the commercial advantage derived from the misappropriation. Damages may include both the actual loss caused by the misappropriation and any unjust enrichment not captured by the actual loss calculation. In lieu of damages measured by actual loss or unjust enrichment, the court may impose a reasonable royalty. If the misappropriation is willful and malicious, the court may award exemplary damages up to twice the amount of actual damages, plus attorney fees.[3]
Federal Option: The Defend Trade Secrets Act
In addition to the Mississippi UTSA, trade secret owners may pursue claims under the federal Defend Trade Secrets Act of 2016 (DTSA), which provides a federal cause of action for misappropriation of trade secrets that are related to a product or service used in, or intended for use in, interstate or foreign commerce. The DTSA allows for ex parte seizure of property in extraordinary circumstances and provides the same range of remedies as the state act. The availability of federal jurisdiction can be advantageous in multi-state disputes or when the defendant has moved to another state.[4]
Practical Steps for Protection
The best trade secret claim is the one you never have to file. Businesses should implement a proactive trade secret protection program that includes identifying and inventorying trade secrets, requiring non-disclosure agreements from employees and contractors, implementing access controls and need-to-know policies, conducting exit interviews when employees depart, and monitoring for unauthorized use of confidential information.
When a departing employee is suspected of taking trade secrets, swift action is essential. Evidence of misappropriation can be destroyed quickly, and delay in seeking injunctive relief can undermine the claim. Our firm advises Mississippi businesses on both preventive measures and enforcement of trade secret rights.[5]