South Dakota
South Dakota Trade Secret Laws: UTSA, Remedies & Deadlines
South Dakota enacted the South Dakota Uniform Trade Secrets Act, S.D. Codified Laws §§ 37-29-1 to 37-29-11, in 1988, providing civil protection for proprietary business information throughout the state. Claims for misappropriation must be brought within three years of discovering the wrong (§ 37-29-6), and the federal Defend Trade Secrets Act furnishes a concurrent federal remedy without displacing the state statute.
This guide is part of our Trade Secret Laws by State series.
Information last verified on 2026-06-25. This article presents general legal information, not legal advice. For a nationwide overview, see Trade Secret Laws by State.
Does South Dakota have a trade secret law?
South Dakota enacted the South Dakota Uniform Trade Secrets Act in 1988, codified at S.D. Codified Laws §§ 37-29-1 to 37-29-11. The statute follows the framework developed by the Uniform Law Commission and governs civil claims by any person or entity whose trade secrets are misappropriated in South Dakota. It defines both trade secret and misappropriation, prescribes available remedies, and fixes a three-year limitations period. Under § 37-29-7, the statute preempts conflicting state tort and restitution claims that would otherwise apply to trade-secret disputes, making it the exclusive state-law vehicle for these cases in South Dakota courts. The federal Defend Trade Secrets Act applies alongside the state statute without preempting it (18 U.S.C. § 1838), so a claimant may assert both sets of claims in a single proceeding and take advantage of whichever forum best suits the facts.
What counts as a trade secret and misappropriation in South Dakota?
S.D. Codified Laws § 37-29-1(4) defines a trade secret as information, including a formula, pattern, compilation, program, device, method, technique, or process, that satisfies two conditions. First, the information must derive independent economic value, actual or potential, from not being generally known to or readily ascertainable by proper means by others who can obtain economic value from its disclosure or use. Second, the owner must have made efforts that are reasonable under the circumstances to maintain its secrecy. Common categories include customer and supplier lists, manufacturing processes, software source code, pricing models, and proprietary formulas.
Misappropriation under § 37-29-1(2) means acquiring a trade secret through improper means, such as theft, bribery, misrepresentation, breach of a duty of confidentiality, or espionage, or using or disclosing a secret without consent when the person knew or had reason to know the secret was improperly obtained or disclosed in breach of a confidence. Section 37-29-1(1) confirms that reverse engineering a product obtained through proper channels and independent development of equivalent information are lawful and do not constitute misappropriation under South Dakota law.
Remedies and the limitations period in South Dakota
The South Dakota Uniform Trade Secrets Act provides several categories of relief for successful claimants:
- Injunctions: Under § 37-29-2, a court may enjoin actual or threatened misappropriation for as long as the trade secret would otherwise remain protectable. In exceptional circumstances, a court may permit continued use conditioned on payment of a reasonable royalty in lieu of a prohibitory order.
- Damages: Section 37-29-3 authorizes recovery of actual loss from misappropriation plus the defendant's unjust enrichment not already captured in that figure, or, as an alternative, a reasonable royalty for the period of unauthorized use or disclosure.
- Exemplary damages: When misappropriation is willful and malicious, a court may award exemplary damages up to twice the compensatory award (§ 37-29-4).
- Attorney fees: Available for willful and malicious misappropriation or when a claim, defense, or motion to terminate an injunction is made in bad faith (§ 37-29-4).
The limitations period is three years. Under § 37-29-6, an action must be brought within three years after misappropriation is discovered or should have been discovered through the exercise of reasonable diligence. Continuing misappropriation is treated as a single claim accruing from the first act that was or reasonably should have been discovered. Because this rule compresses the window in cases of ongoing misappropriation, businesses should investigate suspected trade-secret theft promptly and document their findings carefully.
How the federal DTSA applies in South Dakota
The Defend Trade Secrets Act, 18 U.S.C. §§ 1836-1839, creates a federal civil action for misappropriation when the trade secret relates to a product or service used in, or intended for use in, interstate or foreign commerce. Because the DTSA expressly preserves all state remedies (18 U.S.C. § 1838), South Dakota businesses may plead both DTSA and state-law claims together and select the forum and procedural tools that best fit the situation.
The DTSA provides one remedy not available under South Dakota's statute: a civil ex parte seizure order under § 1836(b)(2), which enables a court to order immediate seizure of materials containing a trade secret before the defendant receives notice, in extraordinary circumstances where other injunctive relief would be inadequate. The DTSA's three-year limitations period from discovery (§ 1836(d)) matches South Dakota's under § 37-29-6.
South Dakota employers and businesses should audit their nondisclosure and confidentiality agreements. Any such agreement signed or updated after May 11, 2016 must include the DTSA whistleblower-immunity notice required by 18 U.S.C. § 1833(b)(3). An employer that omits this notice forfeits the right to recover exemplary damages and attorney fees from that individual under the DTSA, even when the misappropriation is willful and malicious.
This is general legal information, not legal advice. It describes South Dakota and federal trade secret law as of 2026-06-25 and does not address your specific facts. Trade-secret disputes are fact-intensive and filing deadlines are strict. Consult an attorney licensed in South Dakota before taking action.
Related articles
- Trade Secret Laws by State
- Minnesota Trade Secret Laws
- Iowa Trade Secret Laws
- Is AI-generated code copyright infringement?
Last updated: 2026-06-25.
Frequently Asked Questions
What qualifies as a trade secret in South Dakota?
Under S.D. Codified Laws § 37-29-1(4), information qualifies as a trade secret if it derives independent economic value from not being generally known or readily ascertainable by persons who could benefit from it, and the owner takes efforts that are reasonable under the circumstances to maintain secrecy. Customer lists, manufacturing processes, source code, pricing strategies, and proprietary formulas are common examples. Reverse engineering and independent development are lawful and do not constitute misappropriation under South Dakota's statute.
How long do I have to sue for trade secret misappropriation in South Dakota?
Three years from when the misappropriation was discovered or reasonably should have been discovered through the exercise of reasonable diligence, under S.D. Codified Laws § 37-29-6. Continuing misappropriation is treated as a single claim accruing from the first act that was or should have been discovered. Prompt investigation and documentation when misappropriation is suspected helps preserve claims within this window.
What remedies are available under South Dakota trade secret law?
South Dakota's statute authorizes injunctions to stop actual or threatened misappropriation (§ 37-29-2), actual damages plus unjust enrichment or a reasonable royalty (§ 37-29-3), exemplary damages up to twice the award for willful and malicious misappropriation (§ 37-29-4), and attorney fees for willful, malicious, or bad-faith conduct (§ 37-29-4). Federal DTSA claims also make available a civil ex parte seizure order in extraordinary circumstances.
Do South Dakota NDAs need to include a DTSA whistleblower notice?
Yes. Any nondisclosure or confidentiality agreement signed or updated after May 11, 2016 must notify the employee or contractor of the DTSA whistleblower immunity under 18 U.S.C. § 1833(b). An employer that omits this notice forfeits the right to recover exemplary damages and attorney fees from that individual under the DTSA, even when the misappropriation is willful and malicious.
Can I bring both DTSA and South Dakota trade secret claims in the same lawsuit?
Yes. The DTSA does not preempt South Dakota's Uniform Trade Secrets Act (18 U.S.C. § 1838), so a trade secret owner may assert both sets of claims together. Doing so provides access to the DTSA's civil ex parte seizure remedy and federal court jurisdiction while relying on South Dakota's statutory preemption of competing state tort claims (§ 37-29-7). Both sets of claims share a three-year limitations period from discovery.
Sources and References
- South Dakota Uniform Trade Secrets Act, S.D. Codified Laws §§ 37-29-1 to 37-29-11(sdlegislature.gov).gov
- Defend Trade Secrets Act, 18 U.S.C. §§ 1836-1839(law.cornell.edu)
- Uniform Trade Secrets Act (Uniform Law Commission)(uniformlaws.org)
- Economic Espionage Act, 18 U.S.C. §§ 1831-1832(law.cornell.edu)