In the fifth installment of our 2022 Trade Secrets Webinar Series, Seyfarth attorneys Jesse Coleman, Matt Simmons, and Kevin Green discussed legal developments and trends in Texas trade secret and non-compete law and how it is similar to and diverse from other jurisdictions.
As a conclusion to this webinar, we compiled a summary of takeaways:
On June 17, 2022, the Texas Supreme Court affirmed a lower appellate court’s decision, (which we previously wrote about here), which nixed the plaintiff’s $740 million trade secret win at trial and required the plaintiff to either accept a $201 million breach of contract win (which the defendant decried as “jackpot justice”) or go back to trial on all claims.
Briefly, real estate startup HouseCanary brought suit against Title Source, Inc., now known as Amrock, alleging misappropriation of trade secrets under the Texas Uniform Trade Secrets Act (TUTSA), fraud, and breach of contract. At trial, the jury awarded HouseCanary $740 million on its TUTSA and fraud claims and $201 million on its breach of contract claim. HouseCanary could elect to recover one or the other, and it elected to recover the $740 million. On appeal, the lower appellate court reversed the trial court decision regarding TUTSA and fraud based on deficiencies in the jury charge. The appellate court then found that the TUTSA, fraud, and breach of contract claims were inseparable, leaving HouseCanary with two options: to retry all of its claims or recover only the $201 million awarded on the breach of contract claim.
Continue Reading Texas Supreme Court Confirms that HouseCanary Must Fly Toward a $201 Million Judgment or a Retrial
A federal court in Texas recently provided useful insights on what constitutes “solicitation” by a former employee under that employee’s restrictive covenant with his former employer, and the court provided further insights on what inferences courts will, and will not, draw in favor of a plaintiff seeking a preliminary injunction based on alleged misappropriation of trade secrets.[1]
The defendant worked for the plaintiff, Sunbelt, for over twenty years, primarily as a salesperson covering institutional customers.[2] As part of his employment, the defendant signed an employment agreement that, among other things, prohibited him from “solicit[ing]” Sunbelt’s customers or competing with Sunbelt within a certain geographic area.[3] He later left to join one of Sunbelt’s competitors. Sunbelt filed suit and sought a preliminary injunction, asserting that the employed had, among other things, solicited Sunbelt’s former customers, worked for Sunbelt’s competitor within the area prohibited by the non-competition agreement, and misappropriated Sunbelt’s trade secrets.[4]
Continue Reading Federal Court Provides Insight on Meaning of “Solicitation” and Plaintiff’s Burden on Motion for Preliminary Injunction
Seyfarth partner Jesse Coleman and associate Kevin Green authored an IP Litigator article focused on a recent DTSA/TUTSA lawsuit which involved the public disclosure of alleged trade secret in an expired patent. Read the full article from the March / April 2022 edition of IP Litigator here.
Continue Reading Seyfarth Attorneys Author Article on Texas Trade Secret Lawsuit
After a four day bench trial on August 10, 2021, a Houston federal judge ruled that the conceptual designs an oil and gas manufacturing company disclosed to its erstwhile collaborator under an NDA were not eligible for trade secret protection because they were neither secret nor misappropriated due predominantly to disclosure in a prior public patent. The ruling underscores the necessity that trade secrets are—in fact—kept actually secret. Moreover, any prior patent of the party seeking to protect its trade secrets should be scrutinized for similarity with the technology or information allegedly comprising a trade secret.
Continue Reading Texas Oil & Gas Manufacturing Company’s DTSA/TUTSA Lawsuit Unraveled by Public Disclosure of Alleged Trade Secret in its Own Expired Patent
In the fourth installment of our 2021 Trade Secrets Webinar Series, Seyfarth attorneys Jesse Coleman, Matt Simmons, and Kevin Green outlined recent legal developments in Texas trade secret and non-compete law and how it is similar to and diverse from other jurisdictions. The webinar also covered how these latest developments impact counseling, litigation, and deals involving companies with employees based
Continue Reading Webinar Recap! How and Why Texas is Different When it Comes to Trade Secrets and Non-Competes
Real estate startup HouseCanary made headlines when it secured a $700 million judgment against Title Source, Inc., now known as Amrock, in a trade secrets misappropriation case. In short, HouseCanary claimed that Amrock misappropriated its trade secrets to develop an app to compete with the very product Amrock hired HouseCanary to create—a product HouseCanary never delivered.
Continue Reading HouseCanary Weighs a Bird in Hand… Collect on a $201,000,000 Judgment or Retry the Entire Case
On May 19, 2017, Texas Governor Greg Abbott signed into law several amendments to the Texas Uniform Trade Secrets Act (“TUTSA”), located in Chapter 134A of the Texas Civil Practice & Remedies Code. The amendments go into effect on September 1, 2017. In doing so, Texas has aligned its statute more closely with federal law and codified recent judicial interpretations of the law.
Two events precipitated the amendments, one legislative, one judicial. In the first, Congress passed the Defend Trade Secrets Act (“DTSA”) in May 2016, which provides a federal cause of action for trade-secret misappropriation. In the second, the Texas Supreme Court announced in In re M-I L.L.C., 505 S.W.3d 569 (Tex. 2016) that a presumption exists that a party is authorized to participate and assist in the defense of a trade-secret misappropriation claim under TUTSA, which presumption cannot be surmounted unless the trial court considers a seven-factor balancing test. These events resulted in the following key changes to the TUTSA:
Continue Reading Texas Legislature Clarifies and Expands the Texas Uniform Trade Secrets Act