Tennessee
Tennessee Trade Secret Laws: UTSA, Remedies & Deadlines
Tennessee enacted the Tennessee Uniform Trade Secrets Act (TUTSA) in 2000, codified at Tenn. Code §§ 47-25-1701 to 47-25-1709. The statute provides a single civil cause of action for trade secret misappropriation and sets a three-year limitations period measured from the date the misappropriation is discovered or, with reasonable diligence, should have been discovered (§ 47-25-1707).
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 guidance specific to your situation, consult an attorney licensed in Tennessee and review the full Tennessee trade secret statute at Trade Secret Laws by State.
Does Tennessee have a trade secret law?
Tennessee enacted TUTSA in 2000 to replace a patchwork of common-law tort remedies. The statute is codified at Tenn. Code §§ 47-25-1701 to 47-25-1709 and is published on the Tennessee General Assembly's official code at codes.tn.gov. Tennessee's law follows the UTSA framework developed by the Uniform Law Commission, so its definitions and standards are broadly consistent with those applied by the majority of other UTSA-adopting states. TUTSA provides a preemptive civil remedy, displacing conflicting common-law claims relating to misappropriation (§ 47-25-1708). The federal Defend Trade Secrets Act of 2016 (18 U.S.C. §§ 1836-1839) does not preempt TUTSA (18 U.S.C. § 1838), so both laws operate in parallel.
What counts as a trade secret and misappropriation in Tennessee?
Under Tenn. Code § 47-25-1702(4), a trade secret is information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
- derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means 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.
Both elements are required. Information that is publicly available, disclosed in a patent, or easily obtained through ordinary research does not qualify, even if it is commercially valuable. Misappropriation under § 47-25-1702(2) means acquisition of a trade secret by improper means, or disclosure or use of a trade secret without express or implied consent by a person who used improper means to acquire it or who knew, or had reason to know, the secret was acquired improperly or under a duty to maintain its secrecy.
Reverse engineering and independent development are expressly lawful (§ 47-25-1702(2)(ii)). A competitor who independently creates the same formula or process without using improper means has not misappropriated a trade secret.
Remedies and the limitations period in Tennessee
Tennessee courts may grant injunctive relief to prevent actual or threatened misappropriation (§ 47-25-1703). In exceptional circumstances, a court may condition continued use of a trade secret on payment of a reasonable royalty rather than issuing an outright injunction.
Damages under § 47-25-1704 include actual loss caused by the misappropriation and the unjust enrichment of the misappropriator not captured by the actual-loss figure. If neither measure is provable, the court may award a reasonable royalty for the period of unauthorized use. Where the misappropriation was willful and malicious, the court may award exemplary damages up to two times the compensatory amount (§ 47-25-1704(b)). Attorney fees are available to the prevailing party when a claim, counterclaim, or defense was made in bad faith, or when willful and malicious misappropriation was proven (§ 47-25-1705).
The civil limitations period is three years from the date the claimant discovers the misappropriation or, with the exercise of reasonable diligence, should have discovered it (§ 47-25-1707). Tennessee does not deviate from the standard UTSA three-year period. A single continuing act of misappropriation starts the clock once, not anew each day.
How the federal DTSA applies in Tennessee
The Defend Trade Secrets Act, 18 U.S.C. §§ 1836-1839, provides a separate federal civil cause of action when the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce. Because the DTSA does not preempt state law (§ 1838), Tennessee businesses can plead both a DTSA claim in federal court and a TUTSA claim simultaneously. The DTSA's three-year limitations period (§ 1836(d)) mirrors the TUTSA period, but the DTSA adds ex parte seizure orders (§ 1836(b)(2)), which TUTSA does not provide.
Key DTSA compliance point: any confidentiality agreement, employment agreement, or similar contract signed or updated after May 11, 2016, must include a notice that an employee may not be held criminally or civilly liable for disclosing a trade secret to the government or an attorney in reporting a suspected violation of law (18 U.S.C. § 1833(b)(3)). Omitting the notice does not void the agreement but eliminates the employer's right to seek exemplary damages and attorney fees under the DTSA in any later lawsuit. Criminal trade secret theft may also be prosecuted under the federal Economic Espionage Act, 18 U.S.C. §§ 1831-1832.
This article presents general legal information as of 2026-06-25 and is not legal advice. Trade secret law is fact-intensive and outcomes depend on the specific circumstances of each case. Consult an attorney licensed in Tennessee before taking action to protect trade secrets or respond to a misappropriation claim.
Related articles
- Trade Secret Laws by State
- South Carolina Trade Secret Laws: UTSA, Remedies & Deadlines
- Texas Trade Secret Laws: UTSA, Remedies & Deadlines
- Is AI-generated code copyright infringement?
Last updated: 2026-06-25.
Frequently Asked Questions
What qualifies as a trade secret under Tennessee law?
Under Tenn. Code § 47-25-1702(4), information qualifies as a trade secret if it derives independent economic value from not being generally known or readily ascertainable and is subject to reasonable efforts to maintain its secrecy. Common examples include formulas, business methods, customer lists, software source code, and manufacturing processes, provided the owner has taken concrete steps such as confidentiality agreements, access controls, and confidential-marking policies to protect the information consistently.
How long does a business have to sue for trade secret misappropriation in Tennessee?
Tennessee sets a three-year civil limitations period, measured from the date the claimant discovers the misappropriation or, with reasonable diligence, should have discovered it (Tenn. Code § 47-25-1707). The discovery rule means the clock does not necessarily start on the date the misappropriation occurred. However, a court may start the limitations period from the date reasonable investigation would have uncovered the claim, so prompt inquiry after suspecting misappropriation is important.
What remedies are available in a Tennessee trade secret case?
Tennessee courts can award injunctive relief, actual damages plus unjust enrichment (or a reasonable royalty if neither is provable), and exemplary damages up to two times the compensatory amount for willful and malicious misappropriation (Tenn. Code §§ 47-25-1703 to 47-25-1704). Attorney fees may be recovered when the opposing party acted in bad faith or when willful and malicious misappropriation is established (§ 47-25-1705).
Do NDAs and reasonable measures affect trade secret protection in Tennessee?
Yes. One of the two statutory requirements for trade secret status is that the owner maintain efforts that are reasonable under the circumstances to protect secrecy (Tenn. Code § 47-25-1702(4)). Non-disclosure agreements are a primary protective measure, but courts also consider physical security, employee training, access restrictions, and confidentiality markings. Failing to take any protective steps can cause a court to find that information does not qualify as a trade secret regardless of its commercial value.
Can I bring both a Tennessee TUTSA claim and a federal DTSA claim?
Yes. The DTSA does not preempt state trade secret law (18 U.S.C. § 1838), so a plaintiff may pursue both claims. A DTSA claim requires the trade secret to relate to interstate or foreign commerce and must be filed within three years of discovery (§ 1836(d)). The DTSA also provides ex parte seizure relief, which TUTSA does not, and requires a whistleblower-immunity notice in post-May 11, 2016 confidentiality agreements to preserve the right to seek exemplary damages and attorney fees under federal law.
Sources and References
- Tennessee Uniform Trade Secrets Act, Tenn. Code §§ 47-25-1701 to 47-25-1709(codes.tn.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)