In my earlier posts, I explored the complicated definition of “misappropriation” under the Texas Uniform Trade Secret Act (TUTSA). Litigants and courts often fail to understand all the ways a trade secret may be misappropriated. In this post, I explore the last of the six alternative paths to liability under TUTSA:
vi. Disclosure or use of a trade secret of another without express or implied consent by a person who, before a material change of the position of the person, knew or had reason to know that the trade secret was a trade secret and that knowledge of the trade secret had been acquired by accident or mistake [§ 134A.002 (3)(B)(iii)]
Path six imposes liability on the person who obtained the trade secret through accident or mistake. For example, if the new employer did not know that its new employee had obtained the trade secret through improper means or pursuant to a duty to maintain its confidentiality or limit its use, the new employer may still be liable if it later had reason to discover the trade secret and had not materially changed its position. There is currently no Texas case law as to what constitutes a material change in position. A material change in position might be a company’s investment in the production of a product that unknowingly contained another’s trade secret. In that situation, even if the company was later put on notice of the trade secret, the company may not be liable for future production if it can prove that it materially changed its position.