On May 2, 2013, Texas Governor Rick Perry signed into law the Texas Uniform Trade Secrets Act ("TUTSA"). TUTSA becomes effective on September 1, 2013, and will apply to misappropriations of trade secrets occurring on or after said date. Per the act, any misappropriations that occur prior to September 1, 2013, and/or that continue thereafter will be governed by Texas law in effect prior to the effective date of TUTSA. TUTSA provides for the following remedies, which are consistent with the Uniform Trade Secrets Act:

  • The imposition of injunctive relief for actual or threatened trade secret misappropriation; in exceptional circumstances, an injunction may condition future use on the payment of a reasonable royalty for the period of time use could have been prohibited; and, in appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order. (See §134A.003)
  • In addition to or in lieu of injunctive relief, recovery of damages, which may include both actual loss caused by the misappropriation and unjust enrichment not taken into account in computing actual loss. In lieu of damages measured by any other methods, damages caused by a misappropriation may be measured by imposition of a reasonable royalty for the misappropriator's unauthorized disclosure or use. (See §134A.004 (a)) Exemplary damages not to exceed twice the damages awarded under §134A.004 (a) may be awarded if willful and malicious misappropriation is proven. (See §134A.004 (b))
  • The court may award attorneys' fees if the claim of misappropriation is made in bad faith or if willful and malicious misappropriation exists. (See §134A.005 (a)& (c))
  • In an action brought under TUTSA, the court shall preserve the secrecy of an alleged trade secret by reasonable means and there is a presumption in favor of granting protective orders to do so. (See §134A.006)

Of interest with respect to TUTSA, as noted above, is that the act itself sets forth that there is a presumption in favor of granting protective orders to preserve the secrecy of alleged trade secrets during litigation. In addition, TUTSA's definition of "trade secret" includes "financial data" as well as a "list of actual or potential customers or suppliers," neither of which is specified in the Uniform Trade Secrets Act. (See §134A.002 (6)) Finally, TUTSA, unlike the Uniform Trade Secrets Act, also includes the following definitions:

  • "'Proper means' means discovery by independent development, reverse engineering unless prohibited, or any other means that is not improper." (§134A.002 (4))
  • "'Reverse engineering' means the process of studying, analyzing, or disassembling a product or device to discover its design, structure, construction, or source code provided that the product or device was acquired lawfully or from a person having a legal right to convey it." (See §134A.002 (5))

Texas is the 48th state to adopt a version of or legislation similar to the Uniform Trade Secrets Act. At present, only New York and Massachusetts have not done so; however, Massachusetts House Bill 27, an act making uniform the law regarding trade secrets, was referred by the Massachusetts legislature earlier this year to its Joint Committee on the Judiciary.