Tuesday, May 23, 2017

Texas Trade Secret Law Expanded

Modern technology is making it much more difficult for businesses to protect their trade secrets. Long gone are the days when an unscrupulous company officer or employee would have to spend hours late at night at the copy machine to copy and steal valuable trade secrets like customer lists, plans or specifications.  In the digital age, this can be accomplished in a matter of minutes by downloading the data to a flash drive that fits on a key chain. Texas is doing its best to pass laws to protect businesses from trade secret theft.  As discussed in one of my previous articles, the Texas Uniform Trade Secrets Act was passed in 2013, making it easier for businesses to protect their trade secrets.  

This act has now been amended.  On May 19, 2017, the Texas Governor signed the bill into law clarifying the meaning of the act and expanding the definition of trade secrets that are protected.  The act as amended, effective as of Sept. 1, 2017, provides that ""trade secret" means all 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 italicized language is the language that was added by the amendment.  As you can see, the amendment expands the definition of a trade secret so that a wider net is cast to make additional types of company information protectable as a trade secret. So for example, if you own an engineering firm and engineering information or plans are stolen, the act includes this information as a protectable trade secret.  Keep in mind, if your business has suffered a trade secret loss, time is of the essence and you should take immediate action.