Bill Text: TX HB1995 | 2017-2018 | 85th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the Texas Uniform Trade Secrets Act.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2017-05-19 - Effective on 9/1/17 [HB1995 Detail]
Download: Texas-2017-HB1995-Introduced.html
Bill Title: Relating to the Texas Uniform Trade Secrets Act.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2017-05-19 - Effective on 9/1/17 [HB1995 Detail]
Download: Texas-2017-HB1995-Introduced.html
85R11430 SCL-F | ||
By: Elkins | H.B. No. 1995 |
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relating to the Texas Uniform Trade Secrets Act. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 134A.002, Civil Practice and Remedies | ||
Code, is amended by adding Subdivisions (1-a), (3-a), and (7) and | ||
amending Subdivisions (3), (4), and (6) to read as follows: | ||
(1-a) "Clear and convincing" means the measure or | ||
degree of proof that will produce in the mind of the trier of fact a | ||
firm belief or conviction as to the truth of the allegations sought | ||
to be established. | ||
(3) "Misappropriation" means: | ||
(A) acquisition of a trade secret of another by a | ||
person who knows or has reason to know that the trade secret was | ||
acquired by improper means; or | ||
(B) disclosure or use of a trade secret of | ||
another without express or implied consent by a person who: | ||
(i) used improper means to acquire | ||
knowledge of the trade secret; | ||
(ii) at the time of disclosure or use, knew | ||
or had reason to know that the person's knowledge of the trade | ||
secret was: | ||
(a) derived from or through a person | ||
who used [ |
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[ |
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(b) acquired under circumstances | ||
giving rise to a duty to maintain the [ |
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[ |
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(c) derived from or through a person | ||
who owed a duty to the person seeking relief to maintain the [ |
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secrecy of or limit the [ |
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(iii) before a material change of the | ||
position of the person [ |
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know that the trade secret [ |
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knowledge of the trade secret [ |
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mistake. | ||
(3-a) "Owner" means, with respect to a trade secret, | ||
the person or entity in whom or in which rightful, legal, or | ||
equitable title to, or the right to enforce rights in, the trade | ||
secret is reposed. | ||
(4) "Proper means" means discovery by independent | ||
development, reverse engineering unless prohibited, or any other | ||
means that is not improper means. | ||
(6) "Trade secret" means all forms and types of | ||
information, including business, scientific, technical, economic, | ||
or engineering information, and any [ |
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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 [ |
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(A) the owner of the trade secret has taken | ||
reasonable measures under the circumstances to keep the information | ||
secret; and | ||
(B) the information derives independent economic | ||
value, actual or potential, from not being generally known to, and | ||
not being readily ascertainable through [ |
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another person [ |
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the [ |
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[ |
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(7) "Willful and malicious misappropriation" means | ||
intentional misappropriation resulting from the conscious | ||
disregard of the rights of the owner of the trade secret. | ||
SECTION 2. Section 134A.003, Civil Practice and Remedies | ||
Code, is amended by amending Subsection (a) and adding Subsection | ||
(a-1) to read as follows: | ||
(a) Actual or threatened misappropriation may be enjoined | ||
if the order does not prohibit a person from using general | ||
knowledge, skill, and experience that person acquired during | ||
employment. | ||
(a-1) On application to the court, an injunction shall be | ||
terminated when the trade secret has ceased to exist, but the | ||
injunction may be continued for an additional reasonable period of | ||
time in order to eliminate commercial advantage that otherwise | ||
would be derived from the misappropriation. | ||
SECTION 3. Section 134A.004(b), Civil Practice and Remedies | ||
Code, is amended to read as follows: | ||
(b) If willful [ |
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proven by clear and convincing evidence, the fact finder may award | ||
exemplary damages in an amount not exceeding twice any award made | ||
under Subsection (a). | ||
SECTION 4. Section 134A.005, Civil Practice and Remedies | ||
Code, is amended to read as follows: | ||
Sec. 134A.005. ATTORNEY'S FEES. 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) willful [ |
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exists. | ||
SECTION 5. Section 134A.006, Civil Practice and Remedies | ||
Code, is amended to read as follows: | ||
Sec. 134A.006. PRESERVATION OF SECRECY. (a) In an action | ||
under this chapter, a court shall preserve the secrecy of an alleged | ||
trade secret by reasonable means. Notwithstanding any other law, | ||
including Rule 76a, Texas Rules of Civil Procedure, the court may | ||
seal court records. There is a presumption in favor of granting | ||
protective orders to preserve the secrecy of trade secrets. | ||
Protective orders may include provisions limiting access to | ||
confidential information to only the attorneys and their experts, | ||
holding in camera hearings, sealing the records of the action, and | ||
ordering any person involved in the litigation not to disclose an | ||
alleged trade secret without prior court approval. | ||
(b) In an action under this chapter, a presumption exists | ||
that a party is allowed to participate and assist counsel in the | ||
presentation of the party's case. At any stage of the action, the | ||
court may exclude a party and the party's representative or limit a | ||
party's access to the alleged trade secret of another party if other | ||
countervailing interests overcome the presumption. In making this | ||
determination, the court must conduct a balancing test that | ||
considers: | ||
(1) the value of an owner's alleged trade secret; | ||
(2) the degree of competitive harm an owner would | ||
suffer from the dissemination of the owner's alleged trade secret | ||
to the other party; | ||
(3) whether the owner is alleging that the other party | ||
is already in possession of the alleged trade secret; | ||
(4) whether a party's representative acts as a | ||
competitive decision maker; | ||
(5) the degree to which a party's defense would be | ||
impaired by limiting that party's access to the alleged trade | ||
secret; | ||
(6) whether a party or a party's representative | ||
possesses specialized expertise that would not be available to a | ||
party's outside expert; and | ||
(7) the stage of the action. | ||
SECTION 6. Chapter 134A, Civil Practice and Remedies Code, | ||
as amended by this Act, applies only to an action that commences on | ||
or after the effective date of this Act. An action that commences | ||
before the effective date of this Act is governed by the law | ||
applicable to the action immediately before the effective date of | ||
this Act, and that law is continued in effect for that purpose. | ||
SECTION 7. This Act takes effect September 1, 2017. |