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
In one of my earlier blog posts, I explained the how Texas’s anti-SLAAP statute, the Texas Citizens Participation Act (TCPA), is used as a defense to a misappropriation of trade secrets claim. Craig v. Tejas Promotions, LLC, No. 03-16-00611-CV, 2018 WL 2050213 (Tex. App.—Austin May 3, 2018, no pet. h.) provides another example of this defense. Continue Reading The TCPA Strikes Again
O’Connor’s Texas Causes of Action is one of the preeminent sources for information on Texas causes of action and defenses. In the latest edition’s chapter on Trade Secret–Statutory Misappropriation, the authors of Texas Causes of Action cite two articles written by Brackett & Ellis attorneys Joe Cleveland and Heath Coffman. The articles, which help explain the elements and defenses for a trade secret misappropriation claim under the Texas Uniform Trade Secret Act (TUTSA), are: Continue Reading Brackett & Ellis Attorneys Cited in O’Connor’s Texas Causes of Action
Under Texas law, the one-satisfaction rule states that a plaintiff is entitled to only one recovery for any damages suffered because of a particular injury. In TMRJ Holdings, Inc. v. Inhance Techs., LLC, No. 01-16-00849-CV, 2018 WL 326421 (Tex. App.—Houston [1st Dist.] Jan. 9, 2018, no pet. h.), a misappropriation of trade secrets case, defendant argued that plaintiff’s judgment against it for a $4 million reasonable royalty and a permanent injunction violated the one satisfaction rule because the calculation of a reasonable royalty contemplated the future of the misappropriated technology. Continue Reading Houston Court of Appeals Holds that an Award of a Reasonable Royalty and Permanent Injunction Does Not Violate the One-Satisfaction Rule
In my previous posts, I have discussed the varying standards for injunctive relief under the Texas Uniform Trade Secret Act (TUTSA). Some courts have required showings of irreparable harm. The Southern District of Texas, however, does not. Continue Reading Southern District of Texas Does Not Require Irreparable Harm for Modification of Temporary Injunction
In my earlier posts, I discussed the developing standards for injunctive relief under the Texas Uniform Trade Secret Act (TUTSA). Under the Northern District of Texas’s analysis, proof of irreparable harm is required but that irreparable harm can be established with a showing that the “defendant possesses the trade secrets and is in a position to use them.” Continue Reading Corpus Christi Court of Appeals Applies the Irreparable Injury Standard for Trade Secret Injunction
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.
When it comes to injunctive relief under the Texas Uniform Trade Secret Act (TUTSA), courts are slowly developing their standards. In First Command Financial Planning, Inc. v. Velez, No. 4:16-cv-01008-0, 2017 WL 2900405 (N.D. Tex. May 8, 2017), the Northern District of Texas stated its standard. For injunctive relief in First Command Financial, the court required a showing of irreparable harm. The Court then cited the San Antonio Court of Appeals case of Hughes v. Age Industries for the proposition that irreparable harm is established by a showing that the “defendant possesses the trade secrets and is in a position to use them.” Continue Reading Northern District of Texas Case Explores Standard for Injunctive Relief Under Texas Uniform Trade Secret Act
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 fifth of six alternative paths to liability under TUTSA: Continue Reading The Six Paths to Liability Under the Texas Uniform Trade Secret Act – Part 5
The Texas Uniform Trade Secret Act (TUTSA) displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret. Recently, the Corpus Christi Court of Appeals issued an opinion in Super Star International interpreting this provision. The Western District of Texas expanded on this opinion in Embarcadero Technologies, Inc. v. Redgate Software, Inc., No. 1:17-CV-444-RP, 2018 WL 315753 (W.D. Tex. Jan. 5, 2018). Continue Reading Western District of Texas Issues Opinion Interpreting TUTSA Preemption Provision