The Uniform Trade Secrets Act, passed in 1963 in Texas has been amended numerous times since its initial passage. The Texas Legislature maintains a full-text database of all the amendments to this act. However, the Uniform Trade Secret Act (UTSA) is still a work in progress and so it continues to be updated and changed. Codes such as those offered by the spj, prsa, and rtnda are legally enforceable. The UTSA encapsulates three types of provisions: general, specific, and excluded. General provisions are broad principles that protect certain aspects of trade secrecy law while specific provisions cover certain types of behavior or remedies.
Excluded provisions are often found in administrative rules that prohibit certain conduct rather than enacting the law. For example, the spj passed in 2006 prohibits the interception of electronic communications. The rtnda is just one type of code that has its own set of rules. The Texas Supreme Court in Brown v. Brazos Valley Medical Center, Inc., 2001 Tex. LEXIS 29 (Tex. Sup’Ct 2001) held that codes such as those offered by the spj, prsa, and rtnda are legally enforceable.
The spj is an amended version of the 1909 Trade Secrets Act (TSA). The TSA was a comprehensive law that dealt with all aspects of trade secret protection such as misappropriation and infringement, civil remedies, and attorney’s fees among others. The spj was created and amended over the years until it was finally passed by the Texas Legislature in 2006. According to the Texas Legislature, the spj was intended for “uniformity and certainty of law on trade secrets” in order to satisfy civil claims relating to business’ confidential information.
1. Background On The Spj
The spj was a combined effort by both the Texas Attorney General and Texas Legislature to amending a variety of specific provisions that dealt with various aspects of trade secret law. Before the passage of spj in 2006, there was no uniformity in trade secrets law. However, this new act is somewhat incomplete because it only deals with a handful of aspects related to trade secrets protection.
It is not clear whether “unknown” provisions that deal with misappropriation and infringement have been addressed since they are not mentioned at all in spj while other important provisions dealing with issues such as waiver of claims and express contract have either been omitted or not addressed comprehensively.
2. The Spj
The spj states that the legislature finds that “it is in the interest of justice and the public welfare for this state to enact a uniform manner of protection for trade secrets.” The act defines a trade secret as information, including data, that is used by one or more persons to make their goods or services unique.
The Act then says that a trade secret consists of four elements: 1) information 2) custom used by one or more persons to make their goods or services unique (i.e., distinguish them from those of others 3) reasonably not known to others 4) commercial value. This means that each element has to be present in order for something to be regarded as trade secret information.
3. The Spj – Fig. 1
Under the spj, an “owner” of a trade secret can be either the person who created it or the current custodian. The Texas Supreme Court has held that retention of a trade secret by one’s employer or as part of one’s employment is considered to be inside information and thus does not qualify for protection under the spj. However, in Brown v. Brazos Valley Medical Center, Inc., 2001 Tex. LEXIS 29 (Tex. Sup Ct 2001) the court held that even though one is considered to be an “employee” at the time of creating a trade secret, once one leaves one becomes an “owner” of the trade secret.
The Supreme Court’s decision in Brown was based on the notion that if no one is in control of a trade secret then it cannot legally be traded. But the spj does not specifically address this issue and so whether something qualifies as trade secret information can only be determined by looking to other state’s laws and case law for guidance.
4. Trade Secrets Violated Under The Spj
The spj does not attempt to detail every type of prohibited conduct that constitutes theft or misappropriation of a trade secret. For example, the spj does not list every type of action that could be considered a direct violation such as unlawfully accessing a trade secret or designing around trade secrets.
The Texas Supreme Court has held that the act does not apply to misappropriation of information that is disclosed in the course of one’s employment. Similarly, the spj does not address other actions such as obtaining information through trespassing or computer hacking among others.
5. Trade Secrets Misappropriated Under The Spj
Order Violation – If someone unlawfully obtains possession of your trade secret or a part of your trade secret then they would be violating this statute.
