One of the most difficult things in prosecuting a trade secret case is determining how to define the trade secrets that have been misappropriated. If a plaintiff defines the trade secrets too narrowly, it runs the risk of failing to stop the misappropriation. However, if a plaintiff uses a definition of trade secrets that is based on broad or generic terms, then the plaintiff runs the risk that its requested injunctive relief will be denied. Continue Reading Western District of Texas Denies Injunctive Relief Based, in part, on Plaintiff’s Vaguely Defined Trade Secrets
The Texas Uniform Trade Secret Act (TUTSA) allows for injunctive relief based on both “actual” and “threatened” disclosure of trade secrets. One the major unresolved issues of TUTSA, though, is the meaning of “threatened” disclosure. The Eastern District of Texas briefly addresses this meaning in AHS Staffing, LLC v. Quest Staffing Grp., Inc., No. 4:18-CV-00402, 2018 WL 3870067 (E.D. Tex. Aug. 15, 2018). Continue Reading Eastern District of Texas Explores the Meaning of “Threatened Disclosure” under TUTSA
As discussed in previous posts, the Texas Citizens Participation Act (TCPA) is a defense to almost any Texas Uniform Trade Secret Act (TUTSA) claim filed in Texas. However, that defense may not apply to TUTSA claims in federal court. Continue Reading The TCPA Does Not Apply to TUTSA Cases Filed in Federal Court
In Thoroughbred Ventures, LLC v. Disman, No. 4:18-CV-00318, 2018 WL 3752852 (E.D. Tex. Aug. 8, 2018), plaintiff Thoroughbred Ventures sued its former manager Disman, alleging that Disman breached his employment agreement, which provided that all client contact and background information belonged to Thoroughbred and constituted “Confidential Information” and a trade secret of Thoroughbred. Continue Reading Employer Not Entitled to an Injunction Prohibiting Former Employee from Using Customer Information Committed to Memory
Eagle Oil & Gas Co. v. Shale Exploration, LLC, 549 S.W.3d 256 (Tex. App.—Houston [1st Dist.] 2018, pet., pet. dismissed) involves the familiar situation where a plaintiff sues for both breach of a confidentiality agreement and for misappropriation of trade secrets. Defendant asserted that plaintiff was limited to a breach of contract claim because the misappropriation claim was barred by the economic loss rule, which bars a recovery in tort for economic losses caused by a breach of contract if the losses are due to the failure to fulfill a contractual obligation. Continue Reading The Economic Loss Rule Does Not Prohibit a Plaintiff from Asserting Both Breach of Contract and Common Law Misappropriation of Trade Secrets Claims
If you make your living from selling or performing your original works of authorship, it is good practice to register that work of authorship with the United States Copyright Office. Registration creates a public record of your ownership, and if done within 3 months of publication or prior to infringement, it gives the author the right to seek statutory damages and attorneys’ fees from an infringer in a lawsuit. Most importantly, though, registration is prerequisite to bringing a copyright infringement lawsuit in federal court.
Many authors, however, don’t bother to register their works until after an infringement occurs. Continue Reading Do You Have to Register Your Copyright Before Filing Suit? The US Supreme Court Will Soon Decide.
In part one of this series, we saw that collecting a judgment from an individual is difficult because Texas protects up $50,000.00 of personal property items for single individuals and $100,000.00 in personal property items for families. This is one of many debtor protections under Texas law.
Another protection is Texas’s “strong pro-homestead tradition.” Norris v. Thomas, 215 S.W.3d 851, 854 (Tex. 2007). Continue Reading Not So Fast: The Difficulties of Collecting Judgments in Texas (Part II)
When the Texas Uniform Trade Secrets Act (TUTSA) was enacted, it removed trade secret theft as a possible basis for asserting a Texas Theft Liability Act (TTLA) claim. One of the biggest impacts of this change was the recovery of attorneys’ fees for trade secrets cases. Under the TTLA, attorneys’ fees were available to prevailing parties. Under TUTSA, attorney’ fees were only available to a prevailing party if (1) the claim for misappropriation was made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists. Thus, with the enactment of TUTSA, attorneys’ fees became much more difficult to recover.
Importantly, though, litigants must remember that the TTLA still applies to misappropriations that took place before TUTSA’s September 1, 2013 enactment date. The Fifth Circuit case of Automation Support, Inc. v. Humble Design, LLC, No. 17-10433, 2018 WL 1474937 (5th Cir. Mar. 26, 2018) provides a good reminder of this. Continue Reading Don’t Forget about the Texas Theft Liabilty Act When Analyzing a Trade Secrets Claim
When a business severs ties with one of its affiliates, it can be difficult to retrieve and erase all the trade secret information provided to the affiliate. That problem was on display in the franchise context in Stockade Companies, LLC v. Kelly Restaurant Group., LLC, No. 1:17-CV-143-RP, 2017 WL 4640443 (W.D. Tex. Oct. 16, 2017), which involved a franchisor accusing its former franchisee of misappropriating its “buffet system” in its restaurants. Continue Reading If You Own a Trade Secret, You Probably Shouldn’t Throw It Away in a Dumpster
Generally, there are three primary types of damages of damages in a trade secrets case: (1) lost profits, (2) defendant’s profits, and (3) a reasonable royalty. The Federal Circuit in Texas Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc., No. 2016-2121, 2018 WL 2011463 (Fed. Cir. May 1, 2018) explores who—the judge or the jury—can award defendant’s profits. Continue Reading Federal Circuit Determines That Profit Disgorgement is a Matter Exclusively for the Court, Not the Jury