Understanding Trade Secret Protection in Texas

Dallas Intellectual Property Lawyers Explain Trade Secret Laws

Trade secrets are important for businesses who want to protect information and techniques to remain competitive in their respective industries. The theft of your client lists, techniques for providing services, pricing models, research and other important information can damage your business. Former employees, managers, and even competitors may illegally use your trade secrets to put your business at a disadvantage. Fortunately, you have legal options for trade secret protection that you can rely on to stay competitive.

In 2013, Texas lawmakers passed and enacted the Texas Uniform Trade Secrets Act (TUTSA) to help provide a centralized framework for allowing certain entities to protect confidential information. Under TUTSA, there is now a streamlined process for these entities to seek damages against parties who misappropriated trade secrets after the law’s passage. This law is based on the Uniform Trade Secrets Act, which almost every other state uses as a model. Lawmakers amended TUTSA to work with the federal Defend Trade Secrets Act (DTSA).  The DTSA provides additional options for businesses to recover damages from parties who misappropriate their trade secrets.

If you want to protect your trade secrets or take action against a party who stole your trade secrets, then state and federal laws can help. However, there are certain requirements you must meet before pursuing legal options against the party that misappropriated your trade secrets. The Dallas intellectual property lawyers at Carstens & Cahoon, LLP can review your situation and help you determine your legal options.

What Are Examples of Trade Secrets?

Although Texas and federal law define trade secrets, there are common examples of what type of information may qualify. Possible examples of a trade secret in Texas may include but are not limited to:

  • Customer and supplier lists
  • Marketing techniques
  • Engineering designs or information
  • Chemical formulas for products
  • Financial information
  • Pricing information

Trade secrets can be “misappropriated,” which means they are taken from the owner through improper means and used without the owner’s authorization. Misappropriation claims most often arise between employers and former employees or two businesses in competition with each other.

Can I File a Trade Secret Claim Under TUTSA?

You must meet certain requirements to file a trade secret claim under TUTSA. Below is a list of some of the requirements:

  1. The misappropriation of a legally protected trade secret must have occurred after September 1, 2013.
  2. You own the trade secret or have legal authorization to enforce its rights. This means licensees may also be able to file a claim under TUTSA.
  3. The other party must have obtained the trade secret by breaching a confidential relationship or discovered the trade secret through other improper means.
  4. The other party must have used the trade secret without your permission.

The stolen information must qualify as a legally protected trade secret. In addition, state law must consider the breach to qualify as a genuine “misappropriation” of the trade secret.

TUTSA’s definition of a trade secret is broad and can include many different types of information used by businesses. Trade secrets have economic value because they are not known to other parties, who if they knew the trade secret could use it for their own economic gain.

However, a trade secret is information that is independently valuable because is not “generally known or readily ascertainable” to other parties who could use the information for their own benefit. This is because businesses took reasonable steps under the circumstances to secure the trade secret in question.

TUTSA also has specific definitions for what counts as a “misappropriation” of a trade secret. Our trade secret attorneys can review your situation to help you determine whether you could file a claim under TUTSA.

Common Law and Federal Trade Secret Claims

You may be able to file a trade secret claim under common law if the misappropriation occurred before TUTSA’s enactment. However, there are additional requirements for filing a claim under Texas common law.

It may also be possible to seek relief  in federal court the Defend Trade Secrets Act. Like TUTSA, instances of misappropriation must occur after the law’s enactment.

Our Dallas intellectual property attorneys can review your situation and help you determine which options may be available.

Relief for Trade Secret Misappropriation

Texas law provides businesses with options for protecting trade secrets and seeking damages for stolen trade secrets.

You may be able to recover damages caused by the theft and use of your trade secret. In addition, you may also be able to pursue an injunction against a threatened misappropriation, which would prohibit the other party from using the trade secret. Our Dallas intellectual property lawyers can review your situation and determine which options for relief may be available.

Contact Our Dallas Intellectual Property Lawyers for More Information

Carstens & Cahoon, LLP is a Dallas intellectual property law firm with extensive experience helping businesses of all sizes and across various industries. We can help you look at potential options for pursuing trade secret litigation. If you want help protecting your business’s ability to succeed, then we are happy to help. You can call us for a consultation at 972-528-9039 or you can use our online contact form.