The Texas Uniform Trade Secret Act’s definition of misappropriation is complicated, and it is frequently misinterpreted by both the courts and litigants. In this post, I explore the first of the six alternative paths to liability:
a. Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means [§ 134A.002 (3)(A)]
Under path one, the mere acquisition of another’s trade secret is a basis for liability so long as that person has reason to know that the trade secret was acquired by improper means. For example, an employer who hired an employee with information about his former employer could be liable for misappropriation if the new employer had reason to know that the information provided by the new employee was acquired by improper means. The employee could also be liable under this path. However, if that employee obtained the information through proper means—such as disclosure pursuant to the former employer’s confidentiality or non-disclosure agreement—neither the new employer nor the new employee would be liable under this path.