Chapter 1-15 Intellectual Property—Misappropriation of Trade Secrets

• Jurisdiction: United States

1-15 Intellectual Property—Misappropriation of Trade Secrets

1-15:1 Introduction

For trade-secret misappropriations commencing on or after September 1, 2013, the new governing state law is provided by the Texas Uniform Trade Secrets Act (TUTSA).⁴²⁸

1-15:2 Elements

(1) A trade secret exists.⁴²⁹

"Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers, 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.⁴³⁰

(2) Misappropriation of the trade secret has occurred (or is threatened) by:

(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(B) disclosure or use of a trade secret of another without express or implied consent by a person who:

(i) used improper means to acquire knowledge of the trade secret; or
(ii) at the time of disclosure or use, knew or had reason to know that the person's knowledge of the trade secret was:

(a) derived from or through a person who had utilized improper means to acquire it;
(b) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(c) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or

(iii) before a material change of the person's position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.⁴³¹
"Improper means" includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, to limit use, or to prohibit discovery of a trade secret, or espionage through electronic or other means.⁴³²

(3) The defendant's misappropriation has injured (or threatens to injure) the plaintiff, for which the granting of injunctive relief and/or the recovery of damages is appropriate.

For injunctive relief:

Actual or threatened misappropriation may be enjoined. On application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.⁴³³
In exceptional

...