Protecting Your Trade Secrets Part 2: TUTSA to the Rescue!

 

If you own a business that has proprietary information of any kind (secret recipes, customer lists, technical data, etc.), you will be glad to know that Texas has enacted a law just for you. The Texas Uniform Trade Secrets Act (“TUTSA”) was modeled after the Uniform Trade Secrets Act (“UTSA”) authored by the Uniform Law Commissioners of the National Conference of Commissioners on Uniform State Laws in 1979. States without UTSA depend on the common law to resolve disputes over misappropriation of trade secrets. This creates great uncertainty for industry, particularly for companies that conduct business in more than one state, since the courts in different jurisdictions have made conflicting decisions on trade secret issues. Additionally, some important issues have never been adequately addressed in the common law. Variations in state law have created confusion about which law should be applied, and encourage litigants to “forum shop” or file their lawsuits in the jurisdiction with the most favorable laws.

Under the common law, some fundamental concepts were disturbingly unclear, including the precise definition of a “trade secret,” and the question of rights and equitable relief for businesses whose secrets have been improperly obtained and used. In the past, only experts in trade secrets law have been able to interpret the existing law. The uniform act was written to clarify rights and remedies, making the law comprehensible to a far broader segment of the legal profession. As a result, private industry should find it easier, and ultimately less expensive, to obtain competent legal assistance in protecting trade secrets. With these goals in mind, Texas became the 48th state to adopt its version of the UTSA. The adoption of substantially similar language to the uniform statute will make Texas’s trade secrets law more consistent with the laws of other states.

The Texas Uniform Trade Secrets Act went into effect on September 1, 2013.1 Similar to UTSA, the focus of TUTSA is primarily to codify Texas’s current trade secret law, while strengthening trade secret protections and providing greater certainty to misappropriation claims. The new statute can be found in Texas Civil Practice & Remedies Code Chapter 134A.

What Is Misappropriation?

Misappropriation means acquiring a trade secret by “improper means” or from someone who has acquired it through “improper means.” Things like theft, bribery, and misrepresentation are “improper means.” Misappropriation also includes disclosure and use of a trade secret acquired through “improper means.” If there is a misappropriation, the injured person may be entitled to injunctive relief and damages. If there is willful and malicious misappropriation, the injured party may be entitled to exemplary damages.

If you believe a former employee or competitor has gotten your proprietary information without your knowledge or consent, call us today at (713) 574-8626.