Bill Text: TX HB1894 | 2013-2014 | 83rd Legislature | Comm Sub

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Bill Title: Relating to the adoption of the Uniform Trade Secrets Act.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2013-04-22 - Laid on the table subject to call [HB1894 Detail]

Download: Texas-2013-HB1894-Comm_Sub.html

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83R16182 SCL-F
By: Elkins H.B. No. 1894
Substitute the following for H.B. No. 1894:
By: Elkins C.S.H.B. No. 1894

A BILL TO BE ENTITLED
AN ACT
relating to the adoption of the Uniform Trade Secrets Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 6, Civil Practice and Remedies Code, is
amended by adding Chapter 134A to read as follows:
CHAPTER 134A. TRADE SECRETS
Sec. 134A.001. SHORT TITLE. This chapter may be cited as
the Texas Uniform Trade Secrets Act.
Sec. 134A.002. DEFINITIONS. In this chapter:
(1) "Claimant" means a party seeking to recover
damages under this chapter, including a plaintiff,
counterclaimant, cross-claimant, or third-party plaintiff. In an
action in which a party seeks recovery of damages under this chapter
on behalf of another person, "claimant" includes both that other
person and the party seeking recovery of damages.
(2) "Improper means" includes theft, bribery,
misrepresentation, breach or inducement of a breach of a duty to
maintain secrecy, to limit use, or to prohibit discovery of a trade
secret, or espionage through electronic or other means.
(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 had utilized improper means to acquire it;
(b) acquired under circumstances
giving rise to a duty to maintain its secrecy or limit its use; or
(c) derived from or through a person
who owed a duty to the person seeking relief to maintain its secrecy
or limit its use; or
(iii) before a material change of the
person's position, knew or had reason to know that it was a trade
secret and that knowledge of it had been acquired by accident or
mistake.
(4) "Proper means" means discovery by independent
development, reverse engineering unless prohibited, or any other
means that is not improper.
(5) "Reverse engineering" means the process of
studying, analyzing, or disassembling a product or device to
discover its design, structure, construction, or source code
provided that the product or device was acquired lawfully or from a
person having the legal right to convey it.
(6) "Trade secret" means information, including a
formula, pattern, compilation, program, device, method, technique,
process, financial data, or list of actual or potential customers
or suppliers, that:
(A) derives independent economic value, actual
or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and
(B) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
Sec. 134A.003. INJUNCTIVE RELIEF. (a) Actual or
threatened misappropriation may be enjoined. 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.
(b) In exceptional circumstances, an injunction may
condition future use upon payment of a reasonable royalty for no
longer than the period of time for which use could have been
prohibited. Exceptional circumstances include a material and
prejudicial change of position before acquiring knowledge or reason
to know of misappropriation that renders a prohibitive injunction
inequitable.
(c) In appropriate circumstances, affirmative acts to
protect a trade secret may be compelled by court order.
Sec. 134A.004. DAMAGES. (a) In addition to or in lieu of
injunctive relief, a claimant is entitled to recover damages for
misappropriation. Damages can include both the actual loss caused
by misappropriation and the unjust enrichment caused by
misappropriation that is not taken into account in computing actual
loss. In lieu of damages measured by any other methods, the damages
caused by misappropriation may be measured by imposition of
liability for a reasonable royalty for a misappropriator's
unauthorized disclosure or use of a trade secret.
(b) If 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).
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) wilful and malicious misappropriation exists.
Sec. 134A.006. PRESERVATION OF SECRECY. 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.
Sec. 134A.007. EFFECT ON OTHER LAW. (a) Except as provided
by Subsection (b), this chapter displaces conflicting tort,
restitutionary, and other law of this state providing civil
remedies for misappropriation of a trade secret.
(b) This chapter does not affect:
(1) contractual remedies, whether or not based upon
misappropriation of a trade secret;
(2) other civil remedies that are not based upon
misappropriation of a trade secret; or
(3) criminal remedies, whether or not based upon
misappropriation of a trade secret.
(c) To the extent that this chapter conflicts with the Texas
Rules of Civil Procedure, this chapter controls. Notwithstanding
Section 22.004, Government Code, the supreme court may not amend or
adopt rules in conflict with this chapter.
(d) This chapter does not affect the disclosure of public
information by a governmental body under Chapter 552, Government
Code.
Sec. 134A.008. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
This chapter shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject
of this chapter among states enacting it.
SECTION 2. Section 134.002(2), Civil Practice and Remedies
Code, is amended to read as follows:
(2) "Theft" means unlawfully appropriating property
or unlawfully obtaining services as described by Section 31.03,
31.04, [31.05,] 31.06, 31.07, 31.11, 31.12, 31.13, or 31.14, Penal
Code.
SECTION 3. The change in law made by this Act applies to the
misappropriation of a trade secret made on or after the effective
date of this Act. A misappropriation of a trade secret made before
and a continuing misappropriation beginning before the effective
date of this Act are governed by the law in effect immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
SECTION 4. This Act takes effect September 1, 2013.