Trade Secrets Litigation
Trade secrets are an important asset to a business. When your business’s trade secrets are in dispute, our civil litigation lawyers can help protect you by going to court to stop illegal theft, distribution or use of your company’s trade secrets and confidential information. Trade secrets lawsuits usually arise our of breach of contract claims involving breach of non-competition agreements.
To file a lawsuit for misappropriation of trade secrets in Texas, the plaintiff must show:
- The existence of a trade secret;
- The defendant obtained the trade secret through a confidential relationship or by other improper means;
- Unauthorized use or disclosure or use of the secret; and
Information that is not secured or is publicly known cannot qualify as a trade secret. The confidential relationship by which the secrets are obtained could include an employer-employee relationship. In fact this is the most common relationship under which trade secrets are shared. However, there are many cases of trade secret theft that occur without a confidential relationship. Some of these include instances where trade secrets are stolen through computer hacking or outright theft.
Trade secrets can take many forms. Generally, trade secrets includes information that is confidential to your company and is used to obtain an advantage over competitors. It can include customer lists, computer programs, sales strategy, financial information, procedures, economic data, prototypes, training information and many other forms of business information and data.
Many employers have non-disclosure or confidentiality agreements with their employees. Even if you have not required your employees to sign such a document, you can still prevent former employees from using certain confidential and proprietary information. Employees have a duty not to use confidential secret trade information acquired during their employment. However, since employees in Texas are free to actively compete with their former employer, the best way to protect against trade secret infringement is to have employees sign either confidentiality agreements or employment agreements that contain a legitimate non-competition agreement and then seek Non-Compete Enforcement when there is a violation.
Getting a Restraining Order (“TRO”) to Stop Trade Secret Use
If your trade secrets are stolen – whether by current or former employees, competitors or others – you need a business litigation lawyer to act quickly to stop further disclosure of the information. This can be done by way of a temporary restraining order and temporary injunction. To get a temporary restraining order, a lawsuit must be filed against the person who stole the information. A judge is then immediately asked to issue a court order against the perpetrator stopping the use or dissemination of the information.
Generally, within 14 days following the issuance of the restraining order, the court will hold a full hearing with testimony and the former employee will have to appear and testify under oath in court. This can be a very important step in the lawsuit process as the defendant is forced to testify before the judge and can be asked all about the extent of the trade secret theft. The judge can then continue the restraining order as a temporary injunction until the time of a final trial. In addition, you may be entitled to seek actual damages, exemplary (punitive) damages and attorneys fees. When we have client that needs a restraining order, we strive to get it filed and signed by a judge within a day or two.
If you feel that your trade secrets have been compromised, contact Michael P. Fleming, former Harris County Attorney, now.