Texas Insiders Say Businesses Champing At The Bit For New Trade Secrets Law To Take Effect

by Orrick - Trade Secrets Group
Contact

For decades, Texas was the wild west of trade secrets law, governed by the state’s outdated common law with no trade secrets statute on the books.  That changed May 3 when Governor Rick Perry signed legislation making Texas the 48th state to adopt the Uniform Trade Secrets Act.  The lawyers who helped push the legislation across the goal line are now eagerly focused on September 1, when the new law takes effect.

The common law, or the accumulated body of Texas court decisions on trade secrets, just wasn’t up to the task any more, said Joseph F. Cleveland, Jr., an attorney at the firm Brackett & Ellis, P.C.  Cleveland and a handful of other attorneys on the State Bar of Texas Trade Secret Committee testified before legislative committees as the bill worked its way through the Texas Statehouse.

The old law “was simply not designed for the technological developments of the modern era,” said Cleveland, who also met personally with lawmakers on the issue.  “As a result, Texas businesses and those businesses looking to expand to Texas were left to guess as to what proprietary information Texas law will and will not protect.”

Texas lawyers tell Trade Secrets Watch the new statute will make trade secret law both broader and clearer.

“Companies will be able to claim trade secret protection in products that are still under development and have not been put into use,” said Irene Kosturakis, chief IP counsel at BMC Software, Inc. and another committee member who pressed lawmakers to pass the trade secrets bill.

Kosturakis recalled negotiating transactions in which the party on the other side of the table resisted writing Texas law into contracts because of the state’s woeful trade secrets law.  Nor was New York an option, she said; that state is one of two holdouts that still have yet to adopt the UTSA.  Many of her contracts ended up governed by law in Delaware, which has passed the uniform act, she said.

Another feature of the new law welcomed by businesses is its requirement of willfulness before a court can award attorneys’ fees, said Greg Porter, an attorney at the firm Andrews Kurth LLP who testified before both Texas House and Senate committees in March.  “This will give litigants a lot more certainty when they assess their cases,” Porter said.   The new law also permits injunctions for threatened misappropriation, he said.

After nearly 30 years of inaction, the bill sailed from the drafting table to the governor’s desk in less than four months, said Alan Ratliff, an attorney, forensic accountant, and damages expert at the StoneTurn Group LLP.

“I think the new legislation provides greater specificity about what trade secrets are, and broader overall protection of trade secrets, than what existed under Texas common law,” Ratliff said. “Overall, there should be more consistency and clarity in Texas trade secret law and protections.”

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Trade Secrets Group | Attorney Advertising

Written by:

Orrick - Trade Secrets Group
Contact
more
less

Orrick - Trade Secrets Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!