Trade secrets are a form of intellectual property that derive economic value from the fact that they are not known by others. Examples of trade secrets include formulas, processes, computer software, business strategies, and customer lists. As long as the material remains a secret, it can be exploited by the IP owner for economic gain. Companies need to protect trade secrets in order to ensure that competitors cannot steal the information and gain an unfair advantage in the marketplace. Dallas trade secret lawyers understand just how important it is for businesses and individuals to be vigilant about protecting their confidential information and enforcing their intellectual property rights.
The Dallas litigators at Tauler Smith LLP represent clients in trade secret disputes. Contact us today for a free consultation.
What Are Trade Secrets?
The U.S. Patent and Trademark Office (USPTO) officially defines a trade secret as any information that meets the following characteristics:
- The information has “independent economic value” due to not being generally known by others.
- The information has value to others who cannot otherwise obtain it.
- The legal owner of the information has undertaken reasonable efforts to maintain its secrecy.
Significantly, a trade secret can be legally protected forever. In this way, trade secrets differ from other types of intellectual property like copyrights, trademarks, and patents, all of which are subject to time limits and must be registered and renewed in order to qualify for protection.
Texas Trade Secret Laws
There are both federal and Texas trade secret laws that can serve as the basis for a trade secret claim in a Dallas court.
Defend Trade Secrets Act
At the federal level, the Defend Trade Secrets Act (DTSA) is a national law that was passed in 2016. The federal statute imposes civil penalties against individuals and companies that misappropriate trade secrets. If the person disclosing the trade secrets is considered a whistleblower, then they may have legal immunity from prosecution and civil suits under the DTSA.
Texas Uniform Trade Secret Act
At the state level, the Texas Uniform Trade Secret Act (TUTSA) provides additional protections against trade secret theft and misappropriation. The TUTSA uses a definition of trade secrets that is quite broad, including all of the following forms and types of information: “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.”
Economic Espionage Act of 1996
Another statute that may apply to a trade secret claim is the Economic Espionage Act of 1996. This is a federal law that makes it a crime for anyone to steal trade secrets. In some cases, federal prosecutors may deem it appropriate to bring criminal charges against the defendant, which can result in prison time. Additionally, the judge may order that the defendant must forfeit any profits or property they obtained due to the trade secret theft.
The Advantages of Trade Secret Protection in Dallas, TX
There are limits on the degree of protection provided by copyright registration, trademark registration, and patent registration. For example, patents typically only apply for a period of 20 years, while copyrights and trademarks must be renewed. Additionally, IP registration requires the applicant to reveal the valuable information so that it can be published, which makes it possible for unethical competitors to then steal the information because it has been made public. It can also be more expensive and time-consuming to register, maintain, and enforce a patent. You will need to choose between patent protection and trade secret protection because it is not possible to have both at the same time.
Winning a Trade Secret Claim in Dallas, TX
Winning a trade secret claim in Dallas will almost certainly require the assistance of skilled legal counsel. The Dallas trade secret lawyers at Tauler Smith LLP have experience representing clients in IP claims throughout Texas, including copyright, trademark, and trade secret claims. We can also help you be proactive and prevent trade secret misappropriation before it happens by drafting legally binding agreements for your employees and contractors.
If your case goes to trial, there are a number of requirements that must be met by the plaintiff in trade secret litigation. When bringing a trade secret claim under the TUTSA, the plaintiff must establish certain things. First, the plaintiff must show that they possessed some type of valuable business information and that efforts were being made to ensure that the information remained secret. Second, the plaintiff must prove that the secret information was not generally available and/or known by others. Third, the plaintiff must show that the defendant misappropriated the secret information, which is another way of saying that the defendant obtained and then used the information.
Trade Secret Defenses
When defending against an allegation of trade secret misappropriation, the defendant may attempt to show that they did not acquire the information through improper means. For instance, reverse-engineering can be a legal way to learn a trade secret. A defendant in a Dallas trade secret claim might also show that they had express or implied consent to use the trade secret. Absent consent from the plaintiff, the defendant may be able to show that they did not have any reason to know that the trade secret had been acquired through improper means in the first place when it was disclosed to them.
What Trade Secret Remedies Are Available in Dallas?
The two main trade secret remedies available to plaintiffs in a Dallas trade secret claim are injunctive relief and economic damages. When a former employee or someone else with access to your trade secret is threatening to disclose the information to a competitor or use the information themselves, you may file a trade secret claim and request that the court issue an injunction prohibiting the defendant from disclosing or using their knowledge. This kind of trade secret litigation is effective so long as the defendant has not already shared the protected information with others. But what happens if your competitor has already acquired the trade secret and has already used it to your detriment?
When a competing company has unlawfully acquired your trade secret and used it, you may need to file a trade secret claim seeking an award of economic or monetary damages. Significantly, the damages available in Texas trade secret misappropriation litigation include both the actual losses suffered by your business and any profits gained by the defendant, which would be considered unjust enrichment. Additionally, the court has the discretion to order the defendant to pay your attorney’s fees.
Dallas is part of the Dallas-Fort Worth metroplex, which encompasses 11 counties. Dallas-Fort Worth is considered the economic and cultural hub of North Texas, with banking, commerce, technology, and healthcare industries all having a major presence in the region. Additionally, the area has recently seen the highest annual population growth in the United States.
Dallas is often called the Silicon Prairie because it is home to several telecommunications companies, including AT&T, Cisco Systems, Nokia, Texas Instruments, T-Mobile, and Verizon. Texas Instruments has its headquarters in the city and employs more than 10,000 people at the corporate facility and chip plants.
Contact the Dallas Trade Secret Attorneys at Tauler Smith LLP
Our experienced Dallas intellectual property lawyers can examine the details of your case and come up with a solid strategy to defend your valuable trade secrets and maintain your competitive advantage. If someone has already misappropriated your trade secrets, our attorneys can help you take immediate action to obtain an injunction and stop the unlawful use. Call 972-920-6040 or email us now to schedule a free initial consultation.