Trade Secret Litigation Questions

What counts as a trade secret?

Almost any business, technical, or financial information can qualify, including formulas, processes, software, customer and pricing information, and plans, if two conditions are met. The owner must have taken reasonable measures to keep it secret, and the information must have independent economic value from not being generally known or readily ascertainable by others who could profit from it (Tex. Civ. Prac. & Rem. Code § 134A.002(6); 18 U.S.C. § 1839(3)). See What Counts as a Trade Secret in Court.

Should I sue under Texas law or federal law?

Often both. TUTSA claims can be brought in Texas state courts, including the Business Court. The federal DTSA allows suit in federal court when the secret relates to a product or service in interstate or foreign commerce (18 U.S.C. § 1836(b)(1)). The two statutes are similar, but they differ on emergency seizure, which only the DTSA offers, and on court procedures such as sealing.

Does information have to be marked "confidential"?

No. Marking is one of many measures courts consider, along with access limits, passwords, confidentiality agreements, and training. What matters is whether the measures were reasonable under the circumstances.

Can a former employee use what they learned on the job?

An employee may use the general knowledge, skill, and experience gained in employment. A Texas court may not enjoin that use (§ 134A.003(a)), and a DTSA injunction may not prevent a person from taking a new job (18 U.S.C. § 1836(b)(3)(A)(i)). Specific confidential information that qualifies as a trade secret is different and remains protected.

Do I need a noncompete to protect my trade secrets?

No. Trade secret law protects qualifying information whether or not the employee signed a noncompete. A noncompete is a separate contract right. In Texas it is enforceable only if it is ancillary to an otherwise enforceable agreement and reasonable in time, geography, and scope (Tex. Bus. & Com. Code § 15.50). Since September 1, 2025, stricter limits apply to noncompetes for physicians and certain other health care practitioners (§§ 15.50, 15.501). The FTC's nationwide noncompete ban never took effect; it was set aside, and the FTC accepted that ruling on September 5, 2025.

How fast do I need to act?

Quickly. Emergency relief depends on showing imminent, irreparable harm, and unexplained delay undercuts that showing. The outside limit for suit is three years after the misappropriation was or reasonably should have been discovered (Tex. Civ. Prac. & Rem. Code § 16.010; 18 U.S.C. § 1836(d)).

Can a court act before the other side is heard?

Yes, briefly. A Texas temporary restraining order can be issued without notice in limited circumstances and lasts no more than 14 days, with one extension (Tex. R. Civ. P. 680). Under the DTSA, a federal court may order seizure of property without notice, but only in extraordinary circumstances and under strict conditions (18 U.S.C. § 1836(b)(2)). See Emergency Relief: TROs and Temporary Injunctions.

Will suing make my secrets public?

Not if handled correctly. Texas law presumes that protective orders should be granted to preserve trade secrets (§ 134A.006). Since September 1, 2025, a party may file trade secrets under seal in a TUTSA case by filing a notice and affidavit; anyone may move to unseal, and an order on that motion can be appealed immediately (§ 134A.0065). Federal courts apply their own, stricter sealing standard. See Keeping Secrets Secret During the Case.

What can I recover?

Damages for actual loss and for the defendant's unjust enrichment not already counted, or a reasonable royalty; exemplary damages up to twice that amount for willful and malicious misappropriation; attorney's fees in some cases; and an injunction (§§ 134A.003-.005; 18 U.S.C. § 1836(b)(3)). Damages must match the secrets the jury actually finds were misappropriated. See Trade Secret Remedies.

Which court will hear my case?

A Texas district court; the Texas Business Court if the amount in controversy exceeds $5 million (Tex. Gov't Code § 25A.004(d)(5)); or a federal district court for DTSA claims. Many employment agreements also require arbitration. See Where Trade Secret Cases Are Heard.

Can the defendant use the Texas anti-SLAPP statute against my claim?

Usually not, in an employment case. The Texas Citizens Participation Act does not apply to an action arising from an employment or independent-contractor relationship that seeks recovery for misappropriation of trade secrets or enforces a noncompete (Tex. Civ. Prac. & Rem. Code § 27.010(a)(5)). The statute does not apply in federal court at all (Klocke v. Watson, 936 F.3d 240 (5th Cir. 2019)).

My employee reported suspected wrongdoing to the government using company documents. Can I sue?

The DTSA gives immunity to a person who discloses a trade secret in confidence to a government official or a lawyer solely to report or investigate a suspected violation of law, or in a sealed court filing (18 U.S.C. § 1833(b)). Employers must give notice of this immunity in agreements with employees and contractors governing confidential information that are entered into or updated after May 11, 2016. An employer that does not cannot recover exemplary damages or attorney's fees under the DTSA against a person who did not receive notice (§ 1833(b)(3)).

I was sued, or my new hire's former employer sent a letter. What now?

See Responding to a Trade Secret Claim or Demand Letter.

Sources.

• Tex. Civ. Prac. & Rem. Code §§ 16.010, 27.010(a)(5), 134A.002-.006, 134A.0065.
• 18 U.S.C. §§ 1833(b), 1836, 1839(3).
• Tex. Bus. & Com. Code §§ 15.50, 15.501.
• Tex. Gov't Code § 25A.004(d)(5).
• Tex. R. Civ. P. 680.
• Klocke v. Watson, 936 F.3d 240 (5th Cir. 2019).
• FTC, press release (Sept. 5, 2025).

This guide is general information, not legal advice. Law checked through October 20, 2026. See the Disclaimer.