Bill Text: TX SB1945 | 2017-2018 | 85th Legislature | Comm Sub


Bill Title: Relating to the Texas Uniform Trade Secrets Act.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-04-26 - Committee report printed and distributed [SB1945 Detail]

Download: Texas-2017-SB1945-Comm_Sub.html
 
 
  By: Hughes  S.B. No. 1945
         (In the Senate - Filed March 10, 2017; March 27, 2017, read
  first time and referred to Committee on State Affairs;
  April 26, 2017, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; April 26, 2017,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1945 By:  Zaffirini
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  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 [had utilized] improper means to acquire the trade secret
  [it];
                                 (b)  acquired under circumstances
  giving rise to a duty to maintain the [its] secrecy of or limit the
  [its] use of the trade secret; or
                                 (c)  derived from or through a person
  who owed a duty to the person seeking relief to maintain the [its]
  secrecy of or limit the [its] use of the trade secret; or
                           (iii)  before a material change of the
  position of the person [person's position], knew or had reason to
  know that the trade secret [it] was a trade secret and that
  knowledge of the trade secret [it] had been acquired by accident or
  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 [a] 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 [that]:
                     (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 [by] proper means by,
  another person [other persons] who can obtain economic value from
  the [its] disclosure or use of the information [; and
                     [(B)     is the subject of efforts that are
  reasonable under the circumstances to maintain its secrecy].
               (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 [wilful] and malicious misappropriation is
  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 [wilful] and malicious misappropriation
  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. 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.
 
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