Every entrepreneur invests time, toil and energy when launching a venture. We adapt to incorporate everything we’ve learned along the way, including our mistakes. We innovate. But how do we protect all that work? Well, Texas law has an answer for you.
The Texas Uniform Trade Secrets Act defines a trade secret as: “[A]ll forms and types of information, including business, scientific, technical, economic, or engineering information, and any formula, design, prototype, pattern, plan, compilation, program device, program, code, device, method, technique, process, procedure, financial data, or list of actual or potential customers or suppliers, whether tangible or intangible and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if:
- the owner of the trade secret has taken reasonable measures under the circumstances to keep the information secret; and
- the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”
The definition, along with the rest of the Act, can be found here: Tex. Civ. Prac. & Rem. Code § 134A.002.
Examples of Protected Information
Trade secrets specifically include “customer lists, pricing information, client information, customer preferences, buyer contacts, market strategies, blueprints, and drawings.” T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc., 965 S.W.2d 18, 22 (Tex. App.—Houston [1st Dist.] 1998, pet. dism’d). Additionally, “volume of product… projected volume, revenue and projected revenue, sales income… [and] sales trends and data” along with confidential sales pitch proposals, are protected. Keurig Dr. Pepper, Inc., 2019 U.S. Dist. LEXIS 142649 at *4, *9.
How to Know Whether Your Information Is Protected
A trade secret can be “any formula, pattern, device or compilation of information which is used in one’s business and presents an opportunity to obtain an advantage over competitors who do not know or use it.” In re Bass, 113 S.W.3d 735, 739 (Tex. 2003).
“To aid it their inquiry as to whether a trade secret exists under Texas law, courts examine:
- the extent to which the information is known outside of his business;
- the extent to which it is known by employees and others involved in his business;
- the extent of the measures taken by him to guard the secrecy of the information;
- the value of the information to him and to his competitors;
- the amount of effort or money expended by him in developing the information; [and]
- the ease or difficulty with which the information could be properly acquired or duplicated by others.
Keurig Dr. Pepper, Inc., 2019 U.S. Dist. LEXIS 142649 at *10-11.
What to Do if Someone is Stealing Your Trade Secrets
It is illegal in Texas to steal trade secrets. In fact, it’s a third degree felony. See Tex. Pen. C. §31.005. If you believe someone is misappropriating your information, you should immediately contact a Houston business attorney who is familiar with the Act. You may be entitled to recover money and an injunction against future wrongful use.