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The case of AMS Sensors USA Inc. v. Renesas Elec. Am. Inc., Civil Action No. 4:08-cv-00451, 2022 WL 2918893 (E.D. Tex. July 25, 2022) considered whether a breach of confidential information agreement could be based products that did not incorporate the plaintiff’s trade secret into the products design. Ultimately, the court concluded that “use” of a trade secret was not limited to directly implementing a trade secret into a product.  Rather, use included “any exploitation of the trade secret that is likely to result in [the] [p]laintiff’s injury or [d]efendant’s enrichment.”  Additionally, the court concluded that a defendant’s alleged use of a plaintiff’s trade secret includes “relying on the trade secret to assist or accelerate research or development.”Continue Reading Eastern District of Texas Explores Scope of Trade Secret Use Under Confidentiality Agreement

The case of Six Dimensions, Inc. v. Perficient, Inc., 969 F.3d 219 (5th Cir. 2020), dealt with the application of non-compete provisions in employee contracts after certain employees left to work for a competitor. Ultimately, on the trade secrets issue, the Fifth Circuit determined that the plaintiff Six Dimensions failed to provide evidence that the defendant Perficient acquired the trade secrets within the meaning of the Texas Uniform Trade Secrets Act (TUTSA). Therefore, the Court affirmed the decision of the District Court not to grant a new trial on this issue.
Continue Reading Fifth Circuit Holds that Employee’s Possession of Trade Secrets Does Not Establish that the New Employer Acquired Trade Secrets

When a business severs ties with one of its affiliates, it can be difficult to retrieve and erase all the trade secret information provided to the affiliate. That problem was on display in the franchise context in Stockade Companies, LLC v. Kelly Restaurant Group., LLC, No. 1:17-CV-143-RP, 2017 WL 4640443 (W.D. Tex. Oct. 16, 2017), which involved a franchisor accusing its former franchisee of misappropriating its “buffet system” in its restaurants.
Continue Reading If You Own a Trade Secret, You Probably Shouldn’t Throw It Away in a Dumpster

Companies often debate as to whether their software code should be treated as a trade secret or should be registered as a copyright. There are many variables to consider, but perhaps the most important is whether the company wants its source code to remain a secret. The Fifth Circuit Court of Appeals provided this recent breakdown of the intellectual property considerations for software code:
Continue Reading What is the Best Intellectual Property Protection for Software?