Although Texas courts have loosened the restrictions on the enforceability of certain employee agreements over the past two decades, Texas law still requires employee agreements to be supported by adequate consideration—i.e., mutual, non-illusory promises between employee and employer. The recent case of Eurecat US, Inc. v. Marklund, No. 14-15-00418-CV, 2017 WL 2367545 (Tex. App.—Houston [14th Dist.] May 31, 2017, no pet. h.) illustrates what is not adequate consideration. Continue Reading Are Your Employee Non-Disclosure Agreements Supported by Adequate Consideration?
Last February, I had the privilege of speaking at the State Bar of Texas’s Intellectual Property Law Workshop. This year’s theme was IP Issues with Technology Startups, and my speech was Protecting your Startup Client’s Intellectual Property and Customer Relationships: The Intersection of Trade Secrets, Confidentiality Agreements, and Covenants Not to Compete. As a springboard for my speech, I discussed the pilot episode of Silicon Valley, which, as others have pointed out, has all sort of intellectual property issues to explore. Continue Reading Tips for Protecting Your Startup’s Intellectual Property and Customer Relationships: Lessons from HBO’s Silicon Valley
On March 8, 2017, the Texas Fourth Court of Appeals issued its memorandum opinion in Hughes v. Age Industries, No. 04-16-00693, 2017 WL 943423 (Tex. App—San Antonio 2017, no pet. h.). Hughes involves the familiar fact pattern of a key employee leaving his employer to work for a competing business. In addressing the employee’s argument that the employer failed to prove the existence of trade secret, the Court stated that “[i]n the temporary injunction context, a trial court does not decide whether the information sought to be protected is a trade secret; rather it determines whether the applicant has established the information is entitled to trade secret protection until a trial on the merits.” This is an interesting comment because the Texas Uniform Trade Secret Act (TUTSA) makes no mention of this lesser standard in its language. Rather, the Court relied on outdated common law case law as the basis for its statement. The effect of the Court’s statement is to establish a possibly easier standard for establishing a plaintiff’s temporary injunction although I am not clear as to the difference between “trade secret” and “information . . . entitled to trade secret protection until a trial on the merits.” Continue Reading Fourth Court of Appeals Issues Opinion that (Sort of) Interprets the Texas Uniform Trade Secret Act in the Injunction Context
A non-disclosure agreement is a contract that allows a trade secret owner to impose contractual liability for any disclosure or misappropriation of its trade secrets. Non-disclosure agreements allow companies to disclose their trade secrets to new employees or to third-parties (like potential customers or investors) with less danger of destroying the secrecy of the trade secret. A typical non-disclosure agreement requires the other party to keep trade secrets in the strictest confidence, prohibits the other party from disclosing the information without prior written consent, and warns the other party that it cannot make use of the trade secret for his or her personal benefit. Here are five reasons why using non-disclosure agreements can benefit your company: Continue Reading Five Reasons Your Company Should Use Non-Disclosure Agreements
In May 2016, the federal government enacted the Defend Trade Secrets Act (DTSA), which provides federal civil cause of action for trade secrets misappropriation. It is similar to the state-based Uniform Trade Secret Act. One important difference, though, is the DTSA’s notice provision for non-disclosure agreements (NDAs). With the enactment of DTSA, all NDAs entered into or amended after May 11, 2016 are expected to provide notice of certain trade secret disclosure immunities to employees, contractors, or consultants. Continue Reading Time to Update Your Employee Non-Disclosure Agreements