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Michigan Court of Appeals Holds That Not All Common-Law Unfair Competition Claims Are Preempted by Michigan Uniform Trade Secrets Act

In Planet Bingo, LLC et al. v. VKGS, LLC, the Michigan Court of Appeals recently held that not all common-law unfair competition claims are preempted by the Michigan Uniform Trade Secrets Act (“MUTSA”). While holding that MUTSA preempts claims related to misappropriation of a trade secret, the Court also held that Michigan common-law has long recognized that unfair competition claims may encompass more than misappropriation and that such claims are not preempted by MUTSA. Specifically, the defendant’s alleged sale of software based on its similarity to plaintiff’s software and the defendant’s allegedly false representation to a customer that a third-party was using its software are both viable claims that are unrelated to misappropriation of a trade secret and therefore not preempted by MUTSA. This case serves a reminder that while the legislature may abrogate the common law by enacting legislation, the legislature must “speak in no uncertain terms” in order for preemption to apply.

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