Texas 2017 - 85th Regular

Texas Senate Bill SB1945 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	85R11430 SCL-F
1	2		By: Hughes S.B. No. 1945
2		-	(In the Senate - Filed March 10, 2017; March 27, 2017, read
3		-	first time and referred to Committee on State Affairs;
4		-	April 26, 2017, reported adversely, with favorable Committee
5		-	Substitute by the following vote: Yeas 9, Nays 0; April 26, 2017,
6		-	sent to printer.)
7		-	Click here to see the committee vote
8		-	COMMITTEE SUBSTITUTE FOR S.B. No. 1945 By: Zaffirini
9	3
10	4
11	5		A BILL TO BE ENTITLED
12	6		AN ACT
13	7		relating to the Texas Uniform Trade Secrets Act.
14	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	9		SECTION 1. Section 134A.002, Civil Practice and Remedies
16	10		Code, is amended by adding Subdivisions (1-a), (3-a), and (7) and
17	11		amending Subdivisions (3), (4), and (6) to read as follows:
18	12		(1-a) "Clear and convincing" means the measure or
19	13		degree of proof that will produce in the mind of the trier of fact a
20	14		firm belief or conviction as to the truth of the allegations sought
21	15		to be established.
22	16		(3) "Misappropriation" means:
23	17		(A) acquisition of a trade secret of another by a
24	18		person who knows or has reason to know that the trade secret was
25	19		acquired by improper means; or
26	20		(B) disclosure or use of a trade secret of
27	21		another without express or implied consent by a person who:
28	22		(i) used improper means to acquire
29	23		knowledge of the trade secret;
30	24		(ii) at the time of disclosure or use, knew
31	25		or had reason to know that the person's knowledge of the trade
32	26		secret was:
33	27		(a) derived from or through a person
34	28		who used [had utilized] improper means to acquire the trade secret
35	29		[it];
36	30		(b) acquired under circumstances
37	31		giving rise to a duty to maintain the [its] secrecy of or limit the
38	32		[its] use of the trade secret; or
39	33		(c) derived from or through a person
40	34		who owed a duty to the person seeking relief to maintain the [its]
41	35		secrecy of or limit the [its] use of the trade secret; or
42	36		(iii) before a material change of the
43	37		position of the person [person's position], knew or had reason to
44	38		know that the trade secret [it] was a trade secret and that
45	39		knowledge of the trade secret [it] had been acquired by accident or
46	40		mistake.
47	41		(3-a) "Owner" means, with respect to a trade secret,
48	42		the person or entity in whom or in which rightful, legal, or
49	43		equitable title to, or the right to enforce rights in, the trade
50	44		secret is reposed.
51	45		(4) "Proper means" means discovery by independent
52	46		development, reverse engineering unless prohibited, or any other
53	47		means that is not improper means.
54	48		(6) "Trade secret" means all forms and types of
55	49		information, including business, scientific, technical, economic,
56	50		or engineering information, and any [a] formula, design, prototype,
57	51		pattern, plan, compilation, program device, program, code, device,
58	52		method, technique, process, procedure, financial data, or list of
59	53		actual or potential customers or suppliers, whether tangible or
60	54		intangible and whether or how stored, compiled, or memorialized
61	55		physically, electronically, graphically, photographically, or in
62	56		writing if [that]:
63	57		(A) the owner of the trade secret has taken
64	58		reasonable measures under the circumstances to keep the information
65	59		secret; and
66	60		(B) the information derives independent economic
67	61		value, actual or potential, from not being generally known to, and
68	62		not being readily ascertainable through [by] proper means by,
69	63		another person [other persons] who can obtain economic value from
70	64		the [its] disclosure or use of the information [; and
71	65		[(B) is the subject of efforts that are
72	66		reasonable under the circumstances to maintain its secrecy].
73	67		(7) "Willful and malicious misappropriation" means
74	68		intentional misappropriation resulting from the conscious
75	69		disregard of the rights of the owner of the trade secret.
76	70		SECTION 2. Section 134A.003, Civil Practice and Remedies
77	71		Code, is amended by amending Subsection (a) and adding Subsection
78	72		(a-1) to read as follows:
79	73		(a) Actual or threatened misappropriation may be enjoined
80	74		if the order does not prohibit a person from using general
81	75		knowledge, skill, and experience that person acquired during
82	76		employment.
83	77		(a-1) On application to the court, an injunction shall be
84	78		terminated when the trade secret has ceased to exist, but the
85	79		injunction may be continued for an additional reasonable period of
86	80		time in order to eliminate commercial advantage that otherwise
87	81		would be derived from the misappropriation.
88	82		SECTION 3. Section 134A.004(b), Civil Practice and Remedies
89	83		Code, is amended to read as follows:
90	84		(b) If willful [wilful] and malicious misappropriation is
91	85		proven by clear and convincing evidence, the fact finder may award
92	86		exemplary damages in an amount not exceeding twice any award made
93	87		under Subsection (a).
94	88		SECTION 4. Section 134A.005, Civil Practice and Remedies
95	89		Code, is amended to read as follows:
96	90		Sec. 134A.005. ATTORNEY'S FEES. The court may award
97	91		reasonable attorney's fees to the prevailing party if:
98	92		(1) a claim of misappropriation is made in bad faith;
99	93		(2) a motion to terminate an injunction is made or
100	94		resisted in bad faith; or
101	95		(3) willful [wilful] and malicious misappropriation
102	96		exists.
103	97		SECTION 5. Section 134A.006, Civil Practice and Remedies
104	98		Code, is amended to read as follows:
105	99		Sec. 134A.006. PRESERVATION OF SECRECY. (a) In an action
106	100		under this chapter, a court shall preserve the secrecy of an alleged
107		-	trade secret by reasonable means. There is a presumption in favor
108		-	of granting protective orders to preserve the secrecy of trade
109		-	secrets. Protective orders may include provisions limiting access
110		-	to confidential information to only the attorneys and their
111		-	experts, holding in camera hearings, sealing the records of the
112		-	action, and ordering any person involved in the litigation not to
113		-	disclose an alleged trade secret without prior court approval.
	101	+	trade secret by reasonable means. Notwithstanding any other law,
	102	+	including Rule 76a, Texas Rules of Civil Procedure, the court may
	103	+	seal court records. There is a presumption in favor of granting
	104	+	protective orders to preserve the secrecy of trade secrets.
	105	+	Protective orders may include provisions limiting access to
	106	+	confidential information to only the attorneys and their experts,
	107	+	holding in camera hearings, sealing the records of the action, and
	108	+	ordering any person involved in the litigation not to disclose an
	109	+	alleged trade secret without prior court approval.
114	110		(b) In an action under this chapter, a presumption exists
115	111		that a party is allowed to participate and assist counsel in the
116	112		presentation of the party's case. At any stage of the action, the
117	113		court may exclude a party and the party's representative or limit a
118	114		party's access to the alleged trade secret of another party if other
119	115		countervailing interests overcome the presumption. In making this
120	116		determination, the court must conduct a balancing test that
121	117		considers:
122	118		(1) the value of an owner's alleged trade secret;
123	119		(2) the degree of competitive harm an owner would
124	120		suffer from the dissemination of the owner's alleged trade secret
125	121		to the other party;
126	122		(3) whether the owner is alleging that the other party
127	123		is already in possession of the alleged trade secret;
128	124		(4) whether a party's representative acts as a
129	125		competitive decision maker;
130	126		(5) the degree to which a party's defense would be
131	127		impaired by limiting that party's access to the alleged trade
132	128		secret;
133	129		(6) whether a party or a party's representative
134	130		possesses specialized expertise that would not be available to a
135	131		party's outside expert; and
136	132		(7) the stage of the action.
137	133		SECTION 6. Chapter 134A, Civil Practice and Remedies Code,
138	134		as amended by this Act, applies only to an action that commences on
139	135		or after the effective date of this Act. An action that commences
140	136		before the effective date of this Act is governed by the law
141	137		applicable to the action immediately before the effective date of
142	138		this Act, and that law is continued in effect for that purpose.
143	139		SECTION 7. This Act takes effect September 1, 2017.
144		-	* * * * *