One aspect of trade secret law that sometimes surprises business competitors is that there is not always a bright line standard as to what constitutes trade secret misappropriation.\u00a0 For example, may I hire a plane to fly over my competitor\u2019s factory in public air space and take pictures to discover the factory design?\u00a0 If a licensee of my competitor is selling my competitor\u2019s product documentation on Ebay, may I conceal my identity and purchase the documentation?\u00a0 May I pay my competitor\u2019s garbage hauler to allow me to rifle through my competitor\u2019s trash to find customer lists or product design information?\u00a0 The answer is not always clear at first glance.\u00a0 Courts that have considered these issues have engaged in analysis of the specific facts of the cases before them, concepts of commercial morality and the reasonableness of the trade secret owner\u2019s precautions against disclosure.<\/p>\n
Let\u2019s start with a quick overview of the bright lines that do exist.\u00a0 It is not always improper to learn the trade secrets of a competitor.\u00a0 We do not expect businesses to wear blinders that make them disinterested about how their competitor\u2019s products work.\u00a0 Lawful competition is part of capitalism.\u00a0 For this reason, the Texas Uniform Trade Secrets Act (\u201cTUTSA\u201d) expressly includes independent development, reverse engineering and \u201cany other means that is not improper\u201d in TUTSA\u2019s definition of \u201cproper means\u201d of learning a trade secret.\u00a0 Tex. Civ. Prac. & Rem. Code Ann. 134A.002(4).\u00a0 TUTSA is based on the 1985 Uniform Trade Secrets Act (\u201cUTSA\u201d).\u00a0 The commentary to UTSA elaborates that \u201cproper means\u201d also includes observation of items in public use or display and obtaining a trade secret from published literature.\u00a0 UTSA 1985 Commentary<\/em><\/a>, pp. 5-6.<\/p>\n However, that same commentary also states that \u201cimproper means could include otherwise lawful conduct which is improper under the circumstances\u201d and cites as an example a Fifth Circuit opinion applying Texas law, E. I. du Pont de Nemours & Co., Inc. v. Christopher<\/em>, 431 F.2d 1012 (5th<\/sup> Cir. 1970)<\/a>, cert. den. 400 U.S. 1024 (1970).\u00a0 In Du Pont<\/em>, the Fifth Circuit held that the defendants committed a theft of trade secrets by hiring a plane to fly over DuPont\u2019s factory while the factory was under construction to discover DuPont\u2019s trade secrets.\u00a0 The court stated that DuPont was not obligated to undertake the \u201cenormous expense\u201d of building a roof over the factory during the construction period.\u00a0 The court also indicated that the defendants\u2019 conduct violated \u201cthe standard of morality expected in our commercial relations.\u201d<\/p>\n I spent a year of undergrad reading classical Greek philosophy that tied my brain into knots over debates about what is “moral” or “good.”\u00a0 The lesson was that there is often room for debate.<\/p>\n The cases addressing the grey areas of learning trade secrets typically focus on these factors: (1) the subjectively perceived morality of the defendant’s conduct and (2) whether the plaintiff undertook reasonable precautions to prevent disclosure of its trade secret.\u00a0 Thus, the plaintiff in DuPont<\/em> was not required to place a roof over a factory under construction (the court deemed that unreasonable) to prevent aerial espionage.\u00a0 Yet, I would not expect a defendant to commit a theft of trade secrets by viewing that same construction on Google Earth.<\/p>\n Finally, if you want to see how two courts have tackled the other questions I asked in the first paragraph above, take a look at these cases:<\/p>\n Fujitsu Limited v. Tellabs Operations, Inc.<\/em>, No. 12-C-3229, 2013 WL 5587086, *5 (N.D. Ill. October 10, 2013) (applying Texas law pre-TUTSA to deny 12(b)(6) motion to dismiss theft of trade secrets claim where defendant allegedly concealed its identity to purchase a competitor\u2019s product and product documentation on Ebay).<\/p>\n