Opinion ID: 1769163
Heading Depth: 1
Heading Rank: 2

Heading: Misappropriation of a trade secret

Text: For its first point on appeal, Quality Optical contends that the statute of limitations governing the misappropriation of a trade secret commences when the protected information is used, rather than when the information is taken. Misappropriation of a trade secret is defined in Ark.Code Ann. § 4-75-601 as: (A) 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; or, (B) Disclosure or use of a trade secret without express or implied consent by a person who: (i) used improper means to acquire knowledge of the trade secret, or (ii) at the time of disclosure knew or had reason to know that his knowledge of the trade secret was: (a) Derived from or through a person who had utilized improper means to acquire it; (b) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (c) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use . . . Ark.Code Ann. § 4-75-603 sets out the statute of limitations relative to trade secret misappropriation, An action for misappropriation must be brought within three (3) years after the misappropriation is discovered, or by the exercise of reasonable diligence, should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim. Additionally, the Uniform Law Comments on the statute state: This act rejects a continuing wrong approach to the statute of limitations but delays the commencement of the limitation period until an aggrieved person discovers or reasonably should have discovered the existence of a misappropriation. Comment to Ark.Code Ann. § 4-75-603. (Repl.1995). It is undisputed that Trusty misappropriated trade secrets belonging to Quality Optical. Also, given that most of Quality Optical's customers went over to Trusty in short order, Quality Optical at least should have been aware of the misappropriation. However, the appellant argues that Trusty's continued use of the trade secrets, even up to the present, gives rise to a new cause of action, with a new time of accrual, for each successive infraction. Initially, it is apparent that the appellant fails to recognize that because of the use of the alternative or in the statute, Trusty's acquisition of Quality's trade secrets with the requisite mental state, regardless of their use, could constitute a misappropriation which would start the clock on the statute of limitations. This distinction is immaterial in the present case, however, since it is admitted that Trusty began to use the trade secrets in January 1999. This began the running of the statutory time period of three years. Since the plain and clear language of Ark. Code Ann. § 4-75-603 expressly precludes a continuing wrong theory, appellant's challenge to the motion to dismiss on this issue is unavailing, as there is no reasonable doubt that the statute of limitations had indeed expired.