For many Austin trade secret lawyers, it’s a common experience to encounter business owners who have a huge regret: they failed to take necessary precautions to protect their proprietary information. This is the kind of information that qualifies as intellectual property, and it can be incredibly important to the success of the business. The sad truth is that your competitors won’t hesitate to take advantage when a trade secret falls into their lap, which can have devastating consequences for your financial bottom line. Although protecting trade secrets can be difficult for small business owners, it is their responsibility to do so. When a former employee or a rival company misappropriates a trade secret, the business owner needs to take quick action by speaking with a knowledgeable Austin trial attorney to explore the possibility of filing a civil suit.
Tauler Smith LLP is a Texas litigation team that handles trade secret cases in both federal and state court. You can contact us now to schedule a free initial consultation about your case.
How Does Texas Law Define a “Trade Secret”?
A company’s assets are not limited to physical assets. They can also include non-tangible intellectual property, such as copyrights, trademarks, patents, and trade secrets. Businesses need to be vigilant and take steps to protect all these different types of intellectual property, especially if a competitor has infringed on their IP rights.
While most people already have an idea about what constitutes a copyright, trademark, or patent, there is still a lot of confusion about what qualifies as a trade secret. Under Texas law, a trade secret is defined as any protected information that has economic value stemming from its confidentiality. Examples of trade secrets that are litigated in Texas courtrooms include customer lists, business strategy plans, company spreadsheets, manufacturing processes, and formulas or recipes.
Filing an Austin Trade Secret Lawsuit in Texas State or Federal Court
There is both a federal law and a Texas state law that explicitly protect trade secrets against misappropriation. The federal law is called the Defend Trade Secrets Act (DTSA), and it allows a business owner to bring suit in U.S. District Court when the product or service at issue involves interstate commerce. The Texas law is known as the Texas Uniform Trade Secrets Act (TUTSA), and it is basically identical to the laws on the books in most other states because they are all modeled after the Uniform Trade Secrets Act. If a business owner wants to file a lawsuit in state court alleging trade secret misappropriation, they will probably do so under the TUTSA. In these cases, the judge may issue a temporary restraining order that stops the defendant from continuing to use the confidential information while the matter is being litigated to determine whether a permanent injunction should be issued, as well as whether monetary damages are appropriate.
Additionally, it’s possible to bring a civil suit for trade secret misappropriation even when the other party did not know that the information was taken without authorization. That’s because the TUTSA defines “misappropriation” to include the acquisition of a trade secret through either a deliberate act or negligence. In other words, when a company uses information brought to them by a new employee, that company can still be sued in Texas if they should have known that the information was a trade secret.
Winning Your Austin Trade Secret Case
Texas trade secret claims are often complex, which is why it is usually necessary for a plaintiff bringing a trade secret lawsuit to be represented by an experienced intellectual property lawyer. A qualified attorney will be able to anticipate defenses that might be raised by the defendant’s legal counsel. For example, the Texas Uniform Trade Secrets Act (TUTSA) requires plaintiffs to show that they took reasonable measures to ensure that the proprietary information remained secret. Without evidence to prove that you attempted to maintain secrecy, you could lose the case before it even starts.
A knowledgeable Austin trade secret lawyer can also prepare for trial and present the strongest possible arguments to help you secure maximum compensation. Other remedies that may be available in your trade secret case include an injunction to prevent the defendant from using your confidential information in the future, a money royalty to compensate you for any future use if an injunction is impractical, punitive damages to punish the defendant in cases where they intentionally stole the information, and court costs and attorney’s fees for both sides.
How Austin Businesses Can Protect Their Trade Secrets
The theft of sensitive information from businesses often occurs internally, meaning that employees may be the ones who steal the trade secrets. This can make it difficult for companies to protect their trade secrets against misappropriation, which is when it becomes necessary to involve a skilled Austin trade secret attorney and take legal action. In addition to filing a lawsuit to stop trade secret violations once they’ve already occurred, an attorney may be able to help you proactively stop trade secret misappropriation before it happens.
These are some of the steps that Austin small business owners can potentially take to safeguard confidential information:
- Non-Disclosure Agreements: One of the best ways for a business to protect its trade secrets before an employee misappropriates them is to have all employees with access to the information sign a nondisclosure agreement (NDA). An NDA will explicitly prohibit employees from sharing information if they ever leave the company.
- Limit Employee Access: Since it’s possible that not every worker will need to have access to all proprietary information to perform their jobs, you can limit employee access to certain types or categories of data.
- Mark Documents as “Confidential”: Beyond enforcing non-disclosure agreements and limiting employee access to proprietary information, another step that can be taken to safeguard trade secrets against theft is to mark certain documents as “confidential.” This will put current employees on notice and provide a basis for a trade secret infringement lawsuit later, if necessary.
- Questioning Job Applicants: It is also important for companies to take steps when hiring an employee so that the company does not unintentionally misappropriate a competitor’s trade secret. For example, business owners may want to ask job applicants if they ever signed a non-compete agreement with a previous employer. This can reduce the likelihood that you might be sued for trade secret infringement.
About Austin, Texas
Austin is the state capital of Texas, and it has a population approaching one (1) million people. The Texas State Capitol building is listed in the National Register of Historic Places, and it has been officially recognized as a National Historic Landmark. The building is an important structure from an architectural standpoint, having been constructed in 1885 and still ranking as one of the tallest such buildings in the country.
Major bodies of water that run through Austin include Barton Springs Pool (an outdoor swimming area filled with water from natural springs), Lady Bird Lake (a reservoir on the Colorado River), Lake Austin (formed by the construction of Tom River Dam on the Colorado River), Lake Travis (another reservoir on the Colorado River), Lake Walter E. Long (which is used to cool water for nearby Decker Power Plant), and McKinney Falls (within McKinney Falls State Park).
Free Consultation with Austin Trade Secret Attorneys at Tauler Smith LLP
Are you an Austin business owner whose valuable trade secrets were stolen, disclosed, or used without permission by a competitor? Then it is imperative that you act immediately and speak with one of the Austin trade secret attorneys at Tauler Smith LLP. Our legal team can help you prepare a lawsuit, negotiate on your behalf for a possible settlement, and take the case to trial, if needed.