Friday, May 29, 2015

Texas Uniform Trade Secrets Act and Recovery of Attorney’s Fees

May attorneys’ fees be recovered on a claim that trade secrets were stolen?

Under the Texas Uniform Trade Secrets Act, a court may award attorney’s fees to the prevailing party.  “The court may award reasonable attorney’s fees to the prevailing party if: (1) a claim of misappropriation is made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) wilful and malicious misappropriation exists.”  Tex. Civ. Prac. & Rem. Code § 134A.005.

Thursday, May 28, 2015

Texas Statute of Limitations for Fraudulent Inducement of a Contract

Is there a time limit within which one must file a lawsuit if he enter into a contract based upon another person’s intentional misrepresentations?

Generally, under Texas law, a person who wants to get out of a contract because he entered into it based upon the intentional misrepresentations (fraud) of someone else must file suit within four years of when he discovered, or should have discovered, the fraud.  See Tex. Civ. Prac. & Rem. Code § 16.004(a)(4); see also Hooks v. Samson Lone Star, Ltd. Partnership, 58 Tex. Sup. J. 252 (Tex. 2015).

Wednesday, May 27, 2015

Remedies for Misappropriation of Trade Secrets

What remedies are available if trade secrets have been misappropriated?

Under Texas law, a claimant who prevails on a claim for misappropriation of trade secrets may be entitled to injunctive relief as well as damages.  “Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.”  Tex. Civ. Prac. & Rem. Code § 134A.004(a).  Alternatively, “damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator’s unauthorized disclosure or use of a trade secret.”  Tex. Civ. Prac. & Rem. Code § 134A.004(a).  Additionally, “if wilful and malicious misappropriation is proven by clear and convincing evidence, the fact finder may award exemplary damages in an amount not to exceed twice any award” described above.  Tex. Civ. Prac. & Rem. Code § 134A.004(b).

Texas Statute Defines What are Trade Secrets

What are “Trade Secret” in Texas?

The Texas Uniform Trade Secrets Act states that:

“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers that:

(A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

See Tex. Civ. Prac. & Rem. Code section 134A.002(6).