In 2013, the state of Texas enacted the Texas Uniform Trade Secrets Act (TUTSA). The Texas Uniform Trade Secrets Act is similar to many other trade secrets statutes in different states across the U.S., but it is nonetheless important to understand a few key matters under the statutory law:
- How the TUTSA defines a trade secret;
- The elements of a trade secret claim under the TUTSA; and
- How a lawsuit under the TUTSA will look different from a common law trade secret claim.
What is a Trade Secret Under Texas Law?
Under the TUTSA, a trade secret is defined as “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.”
To break down this language a bit, the key elements of a trade secret are that it is not generally known or readily ascertainable by people who could profit from it, and reasonable efforts have been taken to maintain its secrecy.
Misappropriation of a Trade Secret: What is in a Lawsuit?
In order to file a claim for the misappropriation of a trade secret, you first must own a trade secret as it is defined under the TUTSA (and discussed above), and then you must be able to show that another party misappropriated it. There are two primary ways in which the TUTSA says that a trade secret can be misappropriated:
- When it is acquired by someone who knows (or should know) it was acquired improperly; or
- When someone properly has access to the trade secret but improperly discloses it.
Generally speaking, any of the following circumstances could be misappropriation of a trade secret under the TUTSA:
- You acquired a trade secret that you should not have acquired;
- You improperly gained access to a trade secret;
- You had proper access to a trade secret (through your job, perhaps) but you used it in a way you should not have;
- You had property access to a trade secret but used it outside the consented uses;
- You acquired a trade secret in a manner that you did not believe to be improper, but you had reason to know that the person from whom you acquired it got access to it through improper means.
Remedies for Trade Secret Misappropriation
What kinds of remedies are available in a trade secret misappropriation case? The TUTSA allows for the following remedies:
- Injunctive relief for actual misappropriation or threatened misappropriation;
- Damages for actual loss or a reasonable royalty, and in some cases exemplary damages when the defendant’s behavior was particularly malicious; and/or
- Attorneys’ fees.