What Is Trade Secret Misappropriation?

Trade secret misappropriation is acquiring a trade secret by improper means, or using or disclosing it without consent in breach of a duty or knowing it was improperly obtained. Under Texas law, "misappropriation" means acquisition of a trade secret of another by a person who knows or has reason to know it was acquired by improper means, or disclosure or use of a trade secret of another without express or implied consent by a person who used improper means to acquire it, or who knew or had reason to know the knowledge came through improper means, under circumstances creating a duty to maintain secrecy or limit use, or from a person who owed such a duty (Tex. Civ. Prac. & Rem. Code § 134A.002(3)). Federal law defines misappropriation the same basic way (18 U.S.C. § 1839(5)).

"Improper means" includes theft, bribery, misrepresentation, breach or inducing a breach of a duty to maintain secrecy, and espionage, including by electronic means (Tex. Civ. Prac. & Rem. Code § 134A.002(2)). Independent development and reverse engineering of a lawfully obtained product are proper means, not misappropriation. The federal claim applies only if the trade secret relates to a product or service used in, or intended for use in, interstate or foreign commerce (18 U.S.C. § 1836(b)(1)).

The Texas Uniform Trade Secrets Act displaces conflicting Texas tort claims based on the same misappropriation (§ 134A.007(a)), but it does not displace contract claims, such as breach of a confidentiality agreement (§ 134A.007(b)(1)). An injunction may not prohibit a person from using general knowledge, skill, and experience acquired during employment (§ 134A.003(a)).

Pinpoint: Tex. Civ. Prac. & Rem. Code § 134A.002(3); 18 U.S.C. § 1839(5). Related term: Trade Secret Misappropriation.

Sources.

• Tex. Civ. Prac. & Rem. Code ch. 134A: Texas Uniform Trade Secrets Act, including the definition of misappropriation (§ 134A.002(3)). statutes.capitol.texas.gov
• 18 U.S.C. § 1839(5): definition of misappropriation under the Defend Trade Secrets Act. law.cornell.edu

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