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A BILL TO BE ENTITLED
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AN ACT
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relating to the adoption of the Uniform Trade Secrets Act. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 6, Civil Practice and Remedies Code, is |
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amended by adding Chapter 134A to read as follows: |
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CHAPTER 134A. TRADE SECRETS |
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Sec. 134A.001. SHORT TITLE. This chapter may be cited as |
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the Texas Uniform Trade Secrets Act. |
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Sec. 134A.002. DEFINITIONS. In this chapter: |
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(1) "Claimant" means a party seeking to recover |
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damages under this chapter, including a plaintiff, |
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counterclaimant, cross-claimant, or third-party plaintiff. In an |
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action in which a party seeks recovery of damages under this chapter |
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on behalf of another person, "claimant" includes both that other |
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person and the party seeking recovery of damages. |
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(2) "Improper means" includes theft, bribery, |
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misrepresentation, breach or inducement of a breach of a duty to |
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maintain secrecy, to limit use, or to prohibit discovery of a trade |
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secret, or espionage through electronic or other means. |
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(3) "Misappropriation" means: |
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(A) acquisition of a trade secret of another by a |
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person who knows or has reason to know that the trade secret was |
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acquired by improper means; or |
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(B) disclosure or use of a trade secret of |
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another without express or implied consent by a person who: |
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(i) used improper means to acquire |
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knowledge of the trade secret; |
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(ii) at the time of disclosure or use, knew |
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or had reason to know that the person's knowledge of the trade |
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secret was: |
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(a) derived from or through a person |
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who had utilized improper means to acquire it; |
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(b) acquired under circumstances |
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giving rise to a duty to maintain its secrecy or limit its use; or |
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(c) derived from or through a person |
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who owed a duty to the person seeking relief to maintain its secrecy |
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or limit its use; or |
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(iii) before a material change of the |
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person's position, knew or had reason to know that it was a trade |
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secret and that knowledge of it had been acquired by accident or |
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mistake. |
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(4) "Proper means" means discovery by independent |
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development, reverse engineering unless prohibited, or any other |
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means that is not improper. |
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(5) "Reverse engineering" means the process of |
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studying, analyzing, or disassembling a product or device to |
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discover its design, structure, construction, or source code |
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provided that the product or device was acquired lawfully or from a |
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person having the legal right to convey it. |
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(6) "Trade secret" means information, including a |
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formula, pattern, compilation, program, device, method, technique, |
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process, financial data, or list of actual or potential customers |
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or suppliers, that: |
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(A) derives independent economic value, actual |
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or potential, from not being generally known to, and not being |
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readily ascertainable by proper means by, other persons who can |
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obtain economic value from its disclosure or use; and |
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(B) is the subject of efforts that are reasonable |
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under the circumstances to maintain its secrecy. |
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Sec. 134A.003. INJUNCTIVE RELIEF. (a) Actual or threatened |
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misappropriation may be enjoined. On application to the court, an |
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injunction shall be terminated when the trade secret has ceased to |
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exist, but the injunction may be continued for an additional |
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reasonable period of time in order to eliminate commercial |
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advantage that otherwise would be derived from the |
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misappropriation. |
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(b) In exceptional circumstances, an injunction may |
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condition future use upon payment of a reasonable royalty for no |
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longer than the period of time for which use could have been |
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prohibited. Exceptional circumstances include a material and |
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prejudicial change of position before acquiring knowledge or reason |
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to know of misappropriation that renders a prohibitive injunction |
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inequitable. |
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(c) In appropriate circumstances, affirmative acts to |
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protect a trade secret may be compelled by court order. |
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Sec. 134A.004. DAMAGES. (a) In addition to or in lieu of |
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injunctive relief, a claimant is entitled to recover damages for |
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misappropriation. Damages can include both the actual loss caused |
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by misappropriation and the unjust enrichment caused by |
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misappropriation that is not taken into account in computing actual |
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loss. In lieu of damages measured by any other methods, the damages |
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caused by misappropriation may be measured by imposition of |
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liability for a reasonable royalty for a misappropriator's |
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unauthorized disclosure or use of a trade secret. |
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(b) If wilful and malicious misappropriation exists, the |
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court may award exemplary damages in an amount not exceeding twice |
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any award made under Subsection (a). |
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Sec. 134A.005. ATTORNEY'S FEES. The court may award |
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reasonable attorney's fees to the prevailing party if: |
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(1) a claim of misappropriation is made in bad faith; |
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(2) a motion to terminate an injunction is made or |
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resisted in bad faith; or |
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(3) wilful and malicious misappropriation exists. |
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Sec. 134A.006. PRESERVATION OF SECRECY. In an action under |
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this chapter, a court shall preserve the secrecy of an alleged trade |
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secret by reasonable means. There is a presumption in favor of |
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granting protective orders to preserve the secrecy of trade |
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secrets. Protective orders may include provisions limiting access |
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to confidential information to only the attorneys and their |
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experts, holding in-camera hearings, sealing the records of the |
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action, and ordering any person involved in the litigation not to |
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disclose an alleged trade secret without prior court approval. |
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Sec. 134A.007. EFFECT ON OTHER LAW. (a) Except as provided |
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by Subsection (b), this chapter displaces conflicting tort, |
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restitutionary, and other law of this state providing civil |
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remedies for misappropriation of a trade secret. |
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(b) This chapter does not affect: |
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(1) contractual remedies, whether or not based upon |
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misappropriation of a trade secret; |
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(2) other civil remedies that are not based upon |
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misappropriation of a trade secret; or |
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(3) criminal remedies, whether or not based upon |
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misappropriation of a trade secret. |
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(c) To the extent that this chapter conflicts with the Texas |
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Rules of Civil Procedure, this chapter controls. Notwithstanding |
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Section 22.004, Government Code, the supreme court may not amend or |
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adopt rules in conflict with this chapter. |
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Sec. 134A.008. UNIFORMITY OF APPLICATION AND CONSTRUCTION. |
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This chapter shall be applied and construed to effectuate its |
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general purpose to make uniform the law with respect to the subject |
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of this chapter among states enacting it. |
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SECTION 2. Section 134.002(2), Civil Practice and Remedies |
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Code, is amended to read as follows: |
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(2) "Theft" means unlawfully appropriating property |
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or unlawfully obtaining services as described by Section 31.03, |
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31.04, [31.05,] 31.06, 31.07, 31.11, 31.12, 31.13, or 31.14, Penal |
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Code. |
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SECTION 3. The change in law made by this Act applies to the |
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misappropriation of a trade secret made on or after the effective |
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date of this Act. A misappropriation of a trade secret made before |
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and a continuing misappropriation beginning before the effective |
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date of this Act are governed by the law in effect immediately |
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before the effective date of this Act, and that law is continued in |
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effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2013. |