Patrick Keating

Texas Trade Secrets

Category: Secrecy (page 1 of 2)

Texas Amends Trade Secrets Statute

The Texas legislature recently enacted an amendment to the Texas Uniform Trade Secrets Act, which becomes effective on September 1, 2017.  The substantive changes to the statute fall into three categories.

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May a Defendant be Excluded From the Courtroom?

A recurring procedural dispute arises in theft of trade secrets lawsuits.  How should a trial judge resolve a Plaintiff’s request to exclude a Defendant from the courtroom during the time the plaintiff discloses its trade secrets to the court?  Continue reading

When Security Backfires

People who design security measures to protect the confidentiality of business information often face a tension between security and ease of use.  When employees view a security measure as an annoying obstacle to getting the job done, they often find a work around to avoid the annoyance.  This can create a new risk of disclosing the information that the security measure was designed to protect.

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Employees Don’t Have to Sign Confidentiality Agreements

Although it is a good practice for employers to require their employees to sign confidentiality agreements covering trade secrets, failure to do so is not fatal to a theft of trade secrets claim.  This is because Texas law places a duty on employees not to use trade secret information acquired during the employment relationship.  No written confidentiality contract is required.  This duty survives termination of the employment relationship.

Do not assume employees are free to use their employer’s trade secrets just because there is no signed confidentiality agreement.

Here are two cases applying this rule of law: Lamont v. Vaquillas Energy Lopeno, Ltd., 421 S.W.3d 198, 211 (Tex. App.—San Antonio 2013, review denied); Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc., 374 S.W.3d 488, 499 (Tex. App.—Dallas 2012, review denied).

Photograph pursuant to the license located at: https://creativecommons.org/licenses/by/2.0/legalcode

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Avoiding Traps for the Unwary (Part Two)

This post continues the discussion from my last post regarding common mistakes that can cause a loss of trade secrets.  To qualify as a trade secret, information must be the subject of reasonable precautions to maintain secrecy.  This rule applies beyond the procedures that the trade secret owner follows outside of the courthouse.  Parties to lawsuits also need to be careful not to waive their trade secrets by publishing the trade secrets in open court.

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