On February 16, 2017, Texas State Representative Gary Elkins filed H.B. 1995 to amend the Texas Uniform Trade Secrets Act (TUTSA). The bill is the product of months of study completed by a Working Group consisting of members of the Trade Secrets Committee of the Intellectual Property Section of the State Bar of Texas and the Business Law Section of the State Bar of Texas. As a result of that study, the Working Group (of which I was a member) determined that there were four key concerns with TUTSA that needed to be addressed:
- TUTSA never defined the phrase “clear and convincing” or “wilful and malicious” found in the statute.
- In May 2016, Congress passed the Defend Trade Secrets Act (DTSA), a federal law that created a civil cause of action for misappropriation of trade secrets. DTSA generally mirrors TUTSA’s language; however, there are there are some differences that could result in non-uniformity of trade secret law in Texas.
- Several Working Group members noted a problem with Texas courts requiring litigants to follow Texas Rule of Civil Procedure 76a’s cumbersome process to seal court records. Under Texas Rule of Civil Procedure 76a, court records are presumed open, and litigants must post a public notice announcing a motion to seal court records and give the public an opportunity to be heard at the hearing. The Working Group viewed these requirements as in conflict with the presumption in favor of granting protective orders to preserve the secrecy of trade secrets and contrary to TUTSA, which was designed to give litigants reasonable assurances that their trade secrets would be kept confidential during litigation.
- TUTSA does not incorporate the balancing test outlined in the Texas Supreme Court case In re M-I L.L.C., 505 S.W.3d 569 (2016).
In my future posts, I’ll provide a more in-depth analysis of the proposed changes to TUTSA. In the meantime, you can track H.B. 1995’s history and review its text here.