As we approach and move into a new year, I will write a few posts about common mistakes that can cause a loss of trade secret status. The beginning of a new year is a good time to think about ways that we can do better and avoid mistakes.
Texas Trade Secrets
As we approach and move into a new year, I will write a few posts about common mistakes that can cause a loss of trade secret status. The beginning of a new year is a good time to think about ways that we can do better and avoid mistakes.
My last post discussed the “Catch 22” choice that trade secret owners in Texas face when deciding whether to make non-disclosure agreements (“NDAs”) last forever or expire on a specified date. This post discusses damage control steps that a business can take when its trade secrets were disclosed under NDAs that are now expired.
To view a July 8, 2019 update to this post, click this link.
There is an unresolved issue in Texas law that is important to those using non-disclosure agreements (a/k/a confidentiality agreements) to protect trade secrets. For brevity, we’ll call these contracts “NDAs.”
The tension exists between these two items: (i) for NDAs covering trade secrets, the disclosing party often desires to place a perpetual obligation on the recipient to maintain the trade secret in confidence – thereby avoiding the risk of waiving trade secret protection upon expiration of the NDA and (ii) case law holding that parties to a contract with a term of indefinite length may terminate the contract at will. I am unaware of a single court decision answering the question of whether a perpetual NDA governed by Texas law is terminable at will. Continue reading
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