Texas 2013 - 83rd Regular

Texas House Bill HB1894 Compare Versions

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1	1	83R16182 SCL-F
2	2	By: Elkins H.B. No. 1894
3	3	Substitute the following for H.B. No. 1894:
4	4	By: Elkins C.S.H.B. No. 1894
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the adoption of the Uniform Trade Secrets Act.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Title 6, Civil Practice and Remedies Code, is
12	12	amended by adding Chapter 134A to read as follows:
13	13	CHAPTER 134A. TRADE SECRETS
14	14	Sec. 134A.001. SHORT TITLE. This chapter may be cited as
15	15	the Texas Uniform Trade Secrets Act.
16	16	Sec. 134A.002. DEFINITIONS. In this chapter:
17	17	(1) "Claimant" means a party seeking to recover
18	18	damages under this chapter, including a plaintiff,
19	19	counterclaimant, cross-claimant, or third-party plaintiff. In an
20	20	action in which a party seeks recovery of damages under this chapter
21	21	on behalf of another person, "claimant" includes both that other
22	22	person and the party seeking recovery of damages.
23	23	(2) "Improper means" includes theft, bribery,
24	24	misrepresentation, breach or inducement of a breach of a duty to
25	25	maintain secrecy, to limit use, or to prohibit discovery of a trade
26	26	secret, or espionage through electronic or other means.
27	27	(3) "Misappropriation" means:
28	28	(A) acquisition of a trade secret of another by a
29	29	person who knows or has reason to know that the trade secret was
30	30	acquired by improper means; or
31	31	(B) disclosure or use of a trade secret of
32	32	another without express or implied consent by a person who:
33	33	(i) used improper means to acquire
34	34	knowledge of the trade secret;
35	35	(ii) at the time of disclosure or use, knew
36	36	or had reason to know that the person's knowledge of the trade
37	37	secret was:
38	38	(a) derived from or through a person
39	39	who had utilized improper means to acquire it;
40	40	(b) acquired under circumstances
41	41	giving rise to a duty to maintain its secrecy or limit its use; or
42	42	(c) derived from or through a person
43	43	who owed a duty to the person seeking relief to maintain its secrecy
44	44	or limit its use; or
45	45	(iii) before a material change of the
46	46	person's position, knew or had reason to know that it was a trade
47	47	secret and that knowledge of it had been acquired by accident or
48	48	mistake.
49	49	(4) "Proper means" means discovery by independent
50	50	development, reverse engineering unless prohibited, or any other
51	51	means that is not improper.
52	52	(5) "Reverse engineering" means the process of
53	53	studying, analyzing, or disassembling a product or device to
54	54	discover its design, structure, construction, or source code
55	55	provided that the product or device was acquired lawfully or from a
56	56	person having the legal right to convey it.
57	57	(6) "Trade secret" means information, including a
58	58	formula, pattern, compilation, program, device, method, technique,
59	59	process, financial data, or list of actual or potential customers
60	60	or suppliers, that:
61	61	(A) derives independent economic value, actual
62	62	or potential, from not being generally known to, and not being
63	63	readily ascertainable by proper means by, other persons who can
64	64	obtain economic value from its disclosure or use; and
65	65	(B) is the subject of efforts that are reasonable
66	66	under the circumstances to maintain its secrecy.
67	67	Sec. 134A.003. INJUNCTIVE RELIEF. (a) Actual or
68	68	threatened misappropriation may be enjoined. On application to the
69	69	court, an injunction shall be terminated when the trade secret has
70	70	ceased to exist, but the injunction may be continued for an
71	71	additional reasonable period of time in order to eliminate
72	72	commercial advantage that otherwise would be derived from the
73	73	misappropriation.
74	74	(b) In exceptional circumstances, an injunction may
75	75	condition future use upon payment of a reasonable royalty for no
76	76	longer than the period of time for which use could have been
77	77	prohibited. Exceptional circumstances include a material and
78	78	prejudicial change of position before acquiring knowledge or reason
79	79	to know of misappropriation that renders a prohibitive injunction
80	80	inequitable.
81	81	(c) In appropriate circumstances, affirmative acts to
82	82	protect a trade secret may be compelled by court order.
83	83	Sec. 134A.004. DAMAGES. (a) In addition to or in lieu of
84	84	injunctive relief, a claimant is entitled to recover damages for
85	85	misappropriation. Damages can include both the actual loss caused
86	86	by misappropriation and the unjust enrichment caused by
87	87	misappropriation that is not taken into account in computing actual
88	88	loss. In lieu of damages measured by any other methods, the damages
89	89	caused by misappropriation may be measured by imposition of
90	90	liability for a reasonable royalty for a misappropriator's
91	91	unauthorized disclosure or use of a trade secret.
92	92	(b) If wilful and malicious misappropriation is proven by
93	93	clear and convincing evidence, the fact finder may award exemplary
94	94	damages in an amount not exceeding twice any award made under
95	95	Subsection (a).
96	96	Sec. 134A.005. ATTORNEY'S FEES. The court may award
97	97	reasonable attorney's fees to the prevailing party if:
98	98	(1) a claim of misappropriation is made in bad faith;
99	99	(2) a motion to terminate an injunction is made or
100	100	resisted in bad faith; or
101	101	(3) wilful and malicious misappropriation exists.
102	102	Sec. 134A.006. PRESERVATION OF SECRECY. In an action under
103	103	this chapter, a court shall preserve the secrecy of an alleged trade
104	104	secret by reasonable means. There is a presumption in favor of
105	105	granting protective orders to preserve the secrecy of trade
106	106	secrets. Protective orders may include provisions limiting access
107	107	to confidential information to only the attorneys and their
108	108	experts, holding in-camera hearings, sealing the records of the
109	109	action, and ordering any person involved in the litigation not to
110	110	disclose an alleged trade secret without prior court approval.
111	111	Sec. 134A.007. EFFECT ON OTHER LAW. (a) Except as provided
112	112	by Subsection (b), this chapter displaces conflicting tort,
113	113	restitutionary, and other law of this state providing civil
114	114	remedies for misappropriation of a trade secret.
115	115	(b) This chapter does not affect:
116	116	(1) contractual remedies, whether or not based upon
117	117	misappropriation of a trade secret;
118	118	(2) other civil remedies that are not based upon
119	119	misappropriation of a trade secret; or
120	120	(3) criminal remedies, whether or not based upon
121	121	misappropriation of a trade secret.
122	122	(c) To the extent that this chapter conflicts with the Texas
123	123	Rules of Civil Procedure, this chapter controls. Notwithstanding
124	124	Section 22.004, Government Code, the supreme court may not amend or
125	125	adopt rules in conflict with this chapter.
126	126	(d) This chapter does not affect the disclosure of public
127	127	information by a governmental body under Chapter 552, Government
128	128	Code.
129	129	Sec. 134A.008. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
130	130	This chapter shall be applied and construed to effectuate its
131	131	general purpose to make uniform the law with respect to the subject
132	132	of this chapter among states enacting it.
133	133	SECTION 2. Section 134.002(2), Civil Practice and Remedies
134	134	Code, is amended to read as follows:
135	135	(2) "Theft" means unlawfully appropriating property
136	136	or unlawfully obtaining services as described by Section 31.03,
137	137	31.04, [31.05,] 31.06, 31.07, 31.11, 31.12, 31.13, or 31.14, Penal
138	138	Code.
139	139	SECTION 3. The change in law made by this Act applies to the
140	140	misappropriation of a trade secret made on or after the effective
141	141	date of this Act. A misappropriation of a trade secret made before
142	142	and a continuing misappropriation beginning before the effective
143	143	date of this Act are governed by the law in effect immediately
144	144	before the effective date of this Act, and that law is continued in
145	145	effect for that purpose.
146	146	SECTION 4. This Act takes effect September 1, 2013.