Theft of Trade Secrets
Trade secrets are a valuable form of intellectual property (IP), often central to a company’s competitive advantage. Because the value of these secrets depends on the fact that the information is not public knowledge (confidential), businesses must take active and reasonable steps to protect proprietary information such as formulas, processes, customer lists, pricing strategies, and technical data.
Trade Secrets and Non-Disclosure Agreements (NDAs)
At the same time, most businesses will at some point need employees, contractors, and others who may need access to trade secret knowledge to efficiently perform their work for the company. In these instances, a non-disclosure agreement (NDA) acts as a sort of “frontline defense” against trade secret theft. NDAs allow the business to share sensitive information with employees, contractors, vendors, and business partners. The NDA serves as first-line protection against trade secret misappropriation: first, by creating an enforceable contractual obligation, allowing businesses to pursue breach of contract claims if confidential information is disclosed or misused; and second, by creating evidence that can later be used in court to show that the business took “reasonable” measures to protect its trade secrets from improper disclosures.
Critical Role of Injunctive Relief
In trade secret disputes, time is the enemy. Once confidential information is disclosed or used by a competitor, the damage may be impossible to fully undo with money alone. Because money damages are not adequate, courts may grant injunctive relief when the business faces immediate and irreparable harm. If granted in time, a temporary restraining order (TRO) granted as emergency injunctive relief can freeze any activities related to the transfer and dissemination of misappropriated information and mitigate harm.
Trade Secrets
Most trade secret disputes are handled in civil court under the Texas Uniform Trade Secrets Act (TUTSA) and the Federal Defend Trade Secrets Act (DTSA).