USA – TEXAS Trends and Developments Contributed by: Jeff Homrig, Gaby LaHatte and Heather Blacklaws, Weil, Gotshal & Manges LLP
Also like the DTSA, TUTSA provides for injunctive relief against both actual and threatened misappro - priation. Id. § 134A.003. This can be important at the outset of the case where plaintiffs want to prevent any misuse. Texas case law “supports the entry of an injunction upon a showing that a defendant probably, rather than actually, disclosed trade secrets”, and that showing can be made by “proving that a defendant is in possession of the information and is in a position to use it”. TFC Partners, Inc. v Stratton Amenities, LLC , 1:19-cv-58, Dkt. 16, at *6 (W.D. Tex. Jan. 30, 2019) (granting application for temporary restraining order) (internal citation and quotation omitted). This relief can be particularly important in cases involv - ing departing employees. When a former employee leaves for a competitor, a plaintiff may have reasons to suspect that its trade secrets are at risk even though it may lack concrete evidence that misuse has already happened. Texas courts recognise that this risk can be high. For example, “[w]here there is a high degree of similarity between the employee’s former and future employer, it becomes likely, although not certain, that the former’s confidential information will be used and disclosed in the course of his work”. Id. at *7 (internal citation and quotation omitted). Under such circum - stances, courts have found that plaintiffs are likely to prove misappropriation and granted injunctive relief. Id. This standard is significant because plaintiffs can seek injunctive relief early, before the competitive harm is irreversible. Plaintiffs have also seen success in Texas state courts not only in obtaining injunctive relief against actual or threatened misappropriation, but also in securing substantial monetary awards. See, eg, Eagle Oil & Gas Co. v Shale Exploration, LLC , 549 S.W.3d 256, 286 (Tex. App. 2018) (affirming jury lost profits award of USD14.3 million). At the same time, plaintiffs asserting TUTSA claims should be thoughtful when also assert - ing common law claims. TUTSA “displaces conflicting tort, restitutionary, and other law of [Texas] providing civil remedies for misappropriation of a trade secret”. Tex. Civ Prac. & Rem. Code § 134A.007 (a). However, TUTSA does not bar “other civil remedies that are not based upon misappropriation of a trade secret”. Id. § 134A.007 (b)(2). The practical consequence is that plaintiffs must clearly differentiate those theories
throughout the case, including at trial. Title Source v HouseCanary illustrates the risk in failing to do so. There, the court reversed an award of USD235.4 mil - lion compensatory damages and USD47.8 million in punitive damages where the jury was not asked to assess TUTSA and fraud claims separately. 612 S.W.3d 517, 534 (Tex. App. 2020). As a result, the Court could not determine whether the fraud award was based on different conduct or on a theory dis - placed by TUTSA. Id. The Texas Business Court One of the most significant recent developments in Texas trade secret law has been the expansion of the Texas Business Court’s jurisdiction to encompass trade secret and intellectual property disputes not pre-empted by federal law. Since September 2025, the Texas Business Court now has jurisdiction over actions “arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property”, including trade secrets as defined by TUTSA, as well as actions arising out of TUTSA itself. Tex. Gov Code § 25A.004 (d)(4). This jurisdictional grant is significant because it opens a dedicated forum – staffed by judges experienced in complex commercial litigation – to plaintiffs bringing trade secret claims in state court. The Business Court’s jurisdiction is subject to a dual threshold: the suit must involve an amount in contro - versy exceeding USD5 million, and it must fall within at least one of the enumerated substantive categories set forth in the statute. Id. § 25A.004 (d). Cases can be filed directly in the Business Court or removed there by a party in a case originally filed in a district court or county court at law. Id. § 25A.006 (d). Once the statutory requirements are met, the court’s jurisdiction extends to the entire suit – not merely to the individual claims or causes of action that satisfy the jurisdictional hook – as long as all parties and the judge agree. Id. § 25A.004 (f). This means that related claims, like tortious interference, can be heard with trade secret claims in a single proceeding. If the parties do not agree to the Business Court exercising supplemental jurisdiction over a related claim, that claim may pro - ceed in the court of original jurisdiction concurrently with any related claims proceeding in the Business Court. Id.
233 CHAMBERS.COM
Powered by FlippingBook