The Value and Risk of Company Trade Secrets: Protecting Intellectual Property

Company trade secrets are frequently one of a business’s most valuable assets. As a result, this valuable information often walks out the door when an employee, officer, or partner separates from the business—particularly when a competitor or disgruntled ex-partner is in the mix.

Defining Theft of Trade Secrets: Misappropriation & Unauthorized Use

Theft of trade secrets refers to the unauthorized acquisition, disclosure, or use of confidential and proprietary information from a company or organization, with the intent of benefiting oneself or a competitor. Trade secrets can include formulas, designs, patterns, processes, customer lists, customer intelligence, pricing information, or any other information that provides a competitive advantage in the market. A trade secret can be not only a business’s “secret sauce” but also the negative know-how learned to develop that secret sauce—much like Thomas Edison’s 1,000 unsuccessful attempts to invent the light bulb.

Governing Law: The Texas Uniform Trade Secrets Act (TUTSA)

Trade secret law in Texas is governed by the Texas Uniform Trade Secrets Act (TUTSA), which is a version of the Uniform Trade Secrets Act (UTSA) that has been adopted by most states in the United States. The TUTSA provides legal protection for most business information that has economic value due to its secrecy.

Legal Remedies for Trade Secret Theft:  Injunctions, Damages & Attorney Fees

Under TUTSA, a trade secret owner has the right to seek legal remedies against any person who misappropriates or discloses their trade secrets without authorization. Misappropriation can occur through theft, unauthorized use, or breach of confidentiality agreements. Remedies for trade secret theft may include injunctive relief, damages, and attorney fees.

Consequences of Trade Secret Theft: Financial & Reputational Risks

Theft of trade secrets can have significant financial and reputational consequences for the affected company and give rise to significant liability for those involved in the disclosure or use of stolen secrets. Moreover, the business that claims its secrets have been stolen must take prompt steps to prevent the continued use or disclosure of its company secrets, usually through requests for temporary restraining orders and temporary injunctions.

Protect Your Business or Defend Your Rights

Attorney Shawn A. Johnson is an experienced trade secrets lawyer who can help your company protect its trade secrets or help you or your company defend a claim of trade secret misappropriation. If you are involved in a situation involving theft of trade secrets, contact us today to assess your rights.