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Trade Secrets 101: What Texas Businesses and Their Lawyers Need to Know
First, if a business wants to preserve the ability to sue for misappropriation of tradesecrets, it needs to take “reasonable measures” to maintain the confidentiality of the informationthat constitutes the alleged trade secrets. This is only what businesses need to do from a legal perspective. There are many otherpractical things businesses can do, but that’s more a topic for security experts than legal experts
What is the Scope and Effect of the Copyright Act’s Preemption of a State Law Claim For Theft or Misappropriation of Trade Secrets? What Evidence is Insufficient to Avoid Summary Judgment in Favor of the Defendant?
Spear Mktg. v. BancorpSouth Bank, 791 F.3d 586 (5th Cir. 2015)
The Texas Uniform Trade Secrets Act
In this past legislative session, the Texas Legislature enacted the Texas Uniform Trade Secrets Act (“TUTSA”). On September 1, 2013, Texas will join 46 other states that are currently governed by some form of the Uniform Trade Secrets Act. Before enactment of TUTSA, Texas had no central law governing trade secrets. Instead,Texas law on trade secrets was cobbled together from Texas common law, the Restatement of Torts, the Restatement (Third) of Unfair Competition, and the Texas Theft Liability Act. Much of this law was outdated (the Restatement of Torts was drafted in 1939) and was simply not designed for the technological developments of the modern era. As a result, Texas businesses and those businesses looking to expand to Texas were left to guess as to what proprietary information Texas law would and would not protect. TUTSA codifies and modernizes Texas law on misappropriation of trade secrets by providing a simple legislative framework for litigating trade secret cases. Among other things, TUTSA provides an unambiguous and updated definition of trade secrets, a simplified means for obtaining injunctive relief and sealing court records, and an attorneys’ fees provision for recovering fees from those parties who engage in willful and malicious activity.What follows is a section by section analysis of TUTSA. Section 134A.002 of TUTSA contains a list of six new definitions, including definitions for “trade secret,”“misappropriation,” “improper means,” “proper means,” and “reverse engineering.”
The Sound of Inevitability: the Doctrine of Inevitable Disclosure of Trade Secrets Comes to Texas
It happens all the time. A promising new employee joins a company, eager to beginand do well. The company, in its own procedural excitement, gets right down to business byincorporating the new employee into the workplace and fails to secure an agreement from theemployee not to compete with the company and not to disclose sensitive information. Thecompany trains the employee on its own unique procedures, teaches him the tricks of the trade,and shares sensitive client and product information. Eventually, the employee leaves. Withouta confidentiality agreement or covenant-not-to-compete, the question becomes to what extentare the employer’s rights and information protected when compared to the employee’s right toseek employment involving the skills he has acquired? Enter the Doctrine of Inevitable Disclosure.
Trade Secrets Basics for Business Lawyers
Is it possible to cover the key things Texas business lawyers need to know about trade secrets law in five thousand words or less? There’s only one way to find out. (And this paper is it.)
Intellectual Property Basics
A short compendium of intellectual property law, including patents, copyrights, trademarks, and trade secrets
2017 Texas Trade Secrets Update
The first step in protecting a trade-secret is to identify the type of information that qualifies as a trade secret. Under TUTSA, information must meet two requirements in order for it to qualify as a trade secret: (1) it must be the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (2) it must derive 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.
Intellectual Property 101
To compete in the global marketplace, it is imperative that new and existing businesses review their tangible and intangible assets to determine which intellectual property protections may exist or be available to protect such assets under the law. Identifying and initiating the protection of tangible and intangible business assets should be a first priority for business owners so as to optimize the chances of thriving in the constantly evolving marketplace. With a basic understanding of the fundamental concepts underlying patent, trademark, copyright and trade secret laws, business legal advisors will be equipped to identify those properties which may be protectable under existing intellectual property laws, while at the same time advising their clients to take appropriate measures to prevent or mitigate the loss of valuable intellectual property rights.
Protecting Your Client's Information And Customer Relationships: The Intersection Of Non-Competes, Trade Secrets, And Employee Confidentiality Agreements
Although a variety of steps can be taken to protect trade secrets, the primary objectives of a trade secret program is to (1) identify the company’s valuable trade secrets and (2) prevent their public disclosure by making reasonable efforts under the circumstances to maintain their secrecy. Each company has its own unique needs and requirements. Thus, whatever trade secret program is adopted and implemented must be tailored and should complement the company’s existing methods of operation, employment structure, and third party relationships.
Trade Secrets
Broadly speaking, a trade secret is any information that provides a company a competitive edge and is not publicly known. But to be entitled to these protections, a company must undertake some effort to maintain the secrecy of its trade secrets. In other words, it must keep its trade secrets “secret.” Unlike a patent or a copyright, trade secret protection can last forever. But it is a very unforgiving form of protection. It can be easily lost by disclosing the secret publically. Therefore, from the moment a trade secret is created, the owner must guard the secrecy of that secret 24 hours a day, 365 days a year. So how does a company maintain the secrecy of its trade secrets without simply locking the secret up and throwing away the key? Here are some reasonable and relatively simple steps that a company can take to protect its trade secrets under the new Texas Uniform Trade Secrets Act (“TUTSA”), Tex. Civ. Prac. & Rem. Code §134A.002 et seq. (2013).
Covenants to Not to Compete and Injunctive Relief
Almost every case involving non-competes and trade secrets deals in some fashion with injunctive relief. In fact, these cases are typically won or lost at the temporary injunction stage. For example, from the employee’s perspective, a former employer seeking injunctive relief will inevitably claim that damages are impossible to calculate in an effort to buttress its claim of irreparable harm—a necessary component of obtaining injunctive relief. If the injunction is denied, however, the former employer is left with the herculean task of quantifying these otherwise “impossible to calculate” damages. Thus, if an employee can successfully rebuff efforts by his or her former employer to either enforce a non-compete covenant or obtain the substantive equivalent through a temporary injunction preventing him from working for a competitor, that employee has essentially gutted his former employer’s ability to get any relief at all. Similarly, if an employer can obtain injunctive relief, an ultimate ruling on the non-compete may be unnecessary given the amount of time it takes to get to trial. Understanding both the substantive and procedural requirements for obtaining a TRO/TI—as well as their practical application—is, therefore, critical in either obtaining or defeating an injunction.
Intellectual Property for your Entrepreneurial Client: Top Gotchas for Entrepreneurs
I have had the pleasure of working with entrepreneurs throughout my career and enjoy the energy with which they attack the problems they solve. In the effort; however, to move the ball forward as quickly as possible entrepreneurs consistently make the same missteps as their follow company founders. If these minor missteps could be avoided, then the foundation for success could be better laid and the future less complex for sure! Those missteps are as follows:
Intellectual Property 101
Intellectual property, which refers to any creation of the mind, can be the most valuable asset of a company, especially in this information age in which assets are generally of an intangible nature. Intellectual property, however, is only valuable if protected, using government-granted legal rights that grant limited monopolies to its creators. This article will focus on the concept of intellectual property, the identification of primary intellectual property types, the basics about protecting those types of intellectual property, and the legal remedies for violation of such rights.
IP Issues for the Business Generalist - Have you Dotted the "I" in "IP"?
Intellectual property is what ensues from the mind’s intellectual endeavors. It can be an idea, a conception, a discovery, or invention. It can be a work of authorship such as a poem, a story, a book or something as practical as a refinery operations manual. Whatever form it takes, in a business context, intellectual property can be the most valuable asset of a business. This is most true in the information age we live in – an age in which many assets are intangible. It is because of its intangible nature that intellectual property can be evanescent; it can easily slip through one’s fingers, if nothing is done to protect it. For example, an idea shared with everyone benefits all and not just the idea generator. It is clear there is a relationship between the value of something and its exclusive enjoyment, i.e., having the ability to keep others from enjoying it, or, at least enjoying it on the terms its owner dictates. Not unlike real property, which is protected by tangible fences, gates, and locks, which limit its access, intellectual property maintains its value when it is protected. We live in a system in which the protection of intellectual property, i.e., the fences, are government-granted legal rights to use and enjoy intellectual property with a limited exclusivity and there exist legal remedies for violation of such rights. These are called intellectual property rights, and the owners are the creators, authors, and thinkers of the intellectual property or their assignees. We should recognize that intellectual property is different from intellectual property rights; the two terms are not interchangeable. To mix the two in discussion, confuses the basic concepts of intellectual property law and perpetuates the belief that intellectual property law is somehow esoteric and incomprehensible; too difficult to understand. The author hopes that at a minimum, this article can make the distinction between intellectual property and intellectual property rights memorable for the reader. This article will focus on certain aspects of intellectual property law that the legal generalist should be aware of. In addition to providing a survey of the basics of intellectual property law, this article will consider relevant aspects of the America Invents Act and best practices for dealing with non-producing entity (also known as patent assertion entity) lawsuits. We will also consider what about copyright law is most impactful to businesses. Recognizing that branding is an important function of corporate marketing, we will consider the relevant trademark Chapter 11 concerns. Finally, we will discuss the one-year-old Texas Uniform Trade Secrets Act and what the generalist needs to know about it.
What Business Lawyers Need to Know About Intellectual Property
This paper will outline briefly what intellectual property is, and is not. It will cover some of the rights and privileges of intellectual property, as well as some of the myths that can mislead business attorneys and clients alike. While not a comprehensive guide to intellectual property, this paper can be considered a quick primer, with references to more resources. Intellectual property comes in four types: patents, trademarks, copyrights and trade secrets. All four types will be addressed in this paper. After a brief definition, an explanation of the particular right will be provided, as well as an explanation of the elements of infringement (or misappropriation) and related remedies. There are some related antitrust issues associated with intellectual property rights that are outside the scope of this paper. Intellectual property laws tend to be stacked in favor of businesses with plenty of capital available for litigation. Large corporations often have specialized IP lawyers within their legal departments. Medium-sized businesses generally have an IP lawyer on retainer who can address intellectual property-related issues. Small businesses, however, often lack adequate knowledge of intellectual property rights and usually find themselves as defendants in disputes involving intellectual property. Even small businesses, however, can avail themselves of intellectual property rights and may wish to do so in order to pursue their goals with less risk and at lower cost. This paper is directed toward business lawyers who represent small businesses and individuals.
The "Basics" of Patents, Trademarks and Copyrights for Non-IP Attorneys (Knowing Just Enough to Be Safe and to Help Clients Avoid the Most Common Myths and Traps of IP Law)
This article covers all aspects of intellectual property, including: patents, trademarks, copyrights, and trade secrets.
Trade Secrets: An Overview for the Practitioner Representing Small Businesses
Generally, a trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known by the public that gives a business an economic or operational advantage. . Trade secrets are in the nature of property rights that the law protects through both tort and contract principles. Hyde Corp. v. Huffines, 314 S.W.2d 763, 769-770, 158 Tex. 566 (1958). Generally, such principles provide that one who either discloses or uses another’s trade secret, without a privilege to do so, is liable for such disclosure or use if the disclosure or use constitutes a breach of confidence reposed in the party disclosing or using the trade secret by the owner of the trade secret. BP, Inc. v. Klumpe, 101 S.W.3d 461, 472 (Tex. App. - Amarillo 2001, pet. denied); Atlantic Richfield Co. v. Misty Prods., Inc., 820 S.W.2d 414, 422 (Tex.App. - Houston [14th Dist.] 1991, writ denied).
Unfair Competition, Theft of Trade Secrets, Etc.
This paper is an outline of the various topics involving unfair competition.
Fall, 2014
Includes articles on: "Texas Supreme Court’s Recent Shareholder Oppression Opinions Reaffirm Primacy of Common Law Fiduciary Duties Under Gearhart" by Byron Egan and Michael L. Laussade; "Texas Pattern Jury Charge on Trade Secret Misappropriation Near Completion" by Joe Cleveland; "What Happened to TrueCrypt?" by Ron Chichester; and "Judicial CLE Committee Update: Helping Strengthen Texas" by Evan Young.
Fall, 2014
Includes articles on: "Texas Supreme Court’s Recent Shareholder Oppression Opinions Reaffirm Primacy of Common Law Fiduciary Duties Under Gearhart" by Byron Egan and Michael L. Laussade; "Texas Pattern Jury Charge on Trade Secret Misappropriation Near Completion" by Joe Cleveland; "What Happened to TrueCrypt?" by Ron Chichester; and "Judicial CLE Committee Update: Helping Strengthen Texas" by Evan Young.