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Heath Coffman is a shareholder at Brackett & Ellis, P.C. in Fort Worth, Texas.  His practice includes commercial litigation, intellectual property, collections, professional malpractice defense, fiduciary litigation, and appeals.  You can contact him directly at hcoffman@belaw.com.

In Steves & Sons, Inc. v. JELD-WEN, Inc., No. 3:16-CV-545, 2018 WL 2172502 (E.D. Va. May 10, 2018), the Eastern District of Virginia provides an in-depth look at unjust enrichment and reasonable royalty damages under both the Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secrets Act (TUTSA).
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Damages for misappropriation of trade secrets are generally understood as (1) lost profits, (2) defendant’s profits, or (3) a reasonable royalty. These are damages traditionally sought against a competitor. But that does not mean that a departing employee who takes trade secrets to a competitor is immune from a damage award.
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Over the course of several cases, Judge Mazzant from the Eastern District of Texas has emphasized the circumstantial nature of the evidence used to establish misappropriation of trade secrets. SPBS, Inc. v. Mobley, No. 4:18-CV-00391, 2018 WL 4185522, (E.D. Tex. Aug. 31, 2018) is a good example of the court relying on such circumstantial evidence to issue an injunction against a former employee accused of taking trade secrets.

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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.
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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).
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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.
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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.
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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. 
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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).
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