San Jose Business Lawyers Blog
Chapter 134A of the Texas Civil Practices and Remedies Code is known as the Texas Uniform Trade Secrets Act, and Texas Civil Practices and Remedies Code § 134A.002(6) establishes that a trade secret is defined as “all forms and types of information, including business, technical, scientific, economic, or engineering information as well as any design, formula, pattern, prototype, compilation, plan, program, code, program device, device, technique, method, process, procedure, financial data, or list of actual or potential customers or suppliers, whether it is tangible or intangible and whether or how compiled, stored, or memorialized physically, electronically, graphically, photographically, or in writing when an owner of a trade secret takes reasonable measures under the circumstances to keep the information secret, and the information derives actual or potential independent economic value from not being generally known to and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of such information.” Trade secrets are valuable because there are considerable efforts to protect the information, and people will need to work with a Texas business attorney for help protecting their trade secrets.
A legal cause of action for exposed trade secret information is known as misappropriation of trade secrets. This occurs if a trade secret is improperly acquired or is otherwise disclosed or used without consent.
Reasonable Measures to Maintain Trade Secrets
Business owners will have a duty to protect their trade secrets because failure to take steps to protect pertinent information will mean that their information is not considered a trade secret. Some common measures many companies take to protect trade secrets include:
- Asking employees, customers, independent contractors, and vendors with access to confidential information to sign confidentiality or non-disclosure agreements (NDAs)
- Using non-compete or non-solicitation agreements provided they are reasonable in duration, scope, and geographic focus.
- Training employees on the proper ways to handle trade secrets
- Taking care with transmitting or sharing information electronically
- Conducting closing interviews to remind employees of legal obligations they have to protect trade secrets
- Ensuring that departing employees return information and company-owned devices, and deleting sensitive information from personal devices
- Labeling information as proprietary and confidential
- Storing physical information securely
- Storing digital information securely
- Limiting access to privileged information on a need-to-know basis
- Tracking and keeping records of which employees have access to trade secrets
- Establishing trademarks and copyrights
- Considering work-for-hire agreements
Misappropriation of Trade Secrets
Businesses may have legal recourse when an employee or other party inappropriately uses confidential information. Factors that a court will take into consideration when evaluating a claim of misappropriation include:
- How extensively a trade secret is known outside of a business
- How extensively knowledge may be possessed by others involved in the business
- What measures a business took to keep information a secret
- How valuable the information was to the success of a business and its competitors
- How expensive it was to develop a trade secret
- How easy or difficult it was for competitors to acquire or duplicate the protected information
The Texas Civil Practices and Remedies Code specifies that in addition to or instead of injunctive relief, a claimant can be entitled to recover damages for misappropriation, and damages may include both actual losses caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual losses. A court can award reasonable attorney’s fees to a prevailing party when a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists.
Call Us Today to Speak with a Texas Business Attorney
If you need help protecting your trade secret in Texas, make sure that you retain legal counsel for ensuring your information will be protected. A Texas business lawyer will be able to help you take all of the necessary steps.
Structure Law Group, LLP understands how important trade secrets can be to companies all over Texas, and we work closely with our clients to help them do what is required to safeguard the most valuable forms of information. Call (512) 881-7500 or contact us online to schedule a consultation with our Texas business attorney.