8-5 EXCLUDING THE OPPOSING PARTY FROM THE COURTROOM

• Jurisdiction: United States

8-5 Excluding the Opposing Party from the Courtroom

As discussed in previous chapters, TUTSA requires the court to "preserve the secrecy of an alleged trade secret by reasonable means."³ The statute provides several examples of what qualifies as "reasonable means," including by limiting disclosure of trade secret information to attorneys and experts, by holding in camera hearings, or by sealing the record.⁴ One issue that has recently drawn both the Texas Supreme Court and the Texas Legislature's attention is the extent to which courts can exclude the corporate representative of the opposing party from the courtroom to avoid disclosing the trade secret to a competitor.⁵

In 2017, the Texas Legislature amended TUTSA to enact into statutory law the Texas Supreme Court's recent decision in In re M-I L.L.C.⁶ This amendment established a presumption that "a party is allowed to participate and assist counsel in the presentation of the party's case."⁷ As a result, a court may only "limit a party's access to the alleged trade secret of another party if other countervailing interests overcome the presumption."⁸ The TUTSA amendments then list the following seven factors for the court to consider in deciding whether to limit a party's access to trade secrets:

• the trade secret's value;
• the competitive harm the party would suffer if the opposing party obtained access to the trade secret;
• whether the party already possesses the trade secret;
• whether the party's representative in the lawsuit is a "competitive decision maker";
• the degree to which the party's defense would be impaired if the party lacked access to the trade secret;
• whether the party has expertise that would not be available to an outside expert witness; and
• the stage of the action.⁹

Since these changes, few Texas courts have applied this balancing test in published opinions. Regardless, the lesson from these changes is clear, and it is thus increasingly important for a trade secret defendant to take measures early on in a case to ensure that its defense not be limited because its internal experts lack the ability to encounter the alleged trade secret.

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Notes:

^[3] Tex. Civ. Prac. & Rem. Code Ann. § 134A.006.

^[4] Tex. Civ. Prac. & Rem. Code Ann. § 134A.006.

^[5] In reM-IL.L.C., 505 S.W.3d 569 (Tex. 2016).

^[6] Tex. Civ. Prac. & Rem. Code Ann. § 134A.006(b).

^[7] Tex. Civ. Prac. & Rem. Code Ann. § 134A.006(b).

^[8]...