Economic Damages Under the Texas Uniform Trade Secret Act

Trade secrets historically have been a state civil matter; however, the passage of the Defend Trade Secrets Act of 2016 gave additional federal civil remedies in the misappropriation of trade secrets. In 2013, Texas became the 48th state to adopt a Uniform Trade Secrets Act variant, leaving New York and Massachusetts as the remaining holdouts.

Effective September 1, 2013, the Texas Uniform Trade Secret Act (TUTSA) replaced established common law on all trade secret appropriation claims. TUTSA defines trade secrets as information including a formula, pattern, compilation, program, device, method, technique, process, financial data or list of actual or potential customers, or suppliers that:

  • Derive independent, actual or potential, economic value from being unknown, and not readily ascertainable by proper means, to other persons who can obtain economic value from its disclosure or use
  • Are the subject of reasonable efforts under the circumstances to maintain their secrecy

Remedies under TUTSA include injunctive relief and damages, attorney fees and exemplary damages in cases of willful and malicious misappropriation. Available damages include the amount of the actual loss caused by the misappropriation in addition to the unjust enrichment not taken into account in computing the actual loss. Alternatively, damages may be measured by a reasonable royalty for the unauthorized disclosure or use of a trade secret.

In addition, TUTSA includes secrecy preservation of the alleged trade secret by reasonable means, i.e., there’s a presumption in favor of granting protective orders that may include provisions limiting access to confidential information, sealing of records and the issuance of gag orders.

BKD’s litigation support professionals are experienced in performing trade secret damage calculations and in providing expert witness testimony. If you have a civil matter involving a former employee or business partner, BKD is here to assist you.

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Anthony is a director with BKD’s Forensics & Valuation Services division, providing business valuation, forensic accounting, special investigations, bankruptcy and complex litigation support, including expert testimony. He has more than 16 years of experience offering financial solutions to industry leaders as well as legal counsel in economic loss and financial accounting matters.

Anthony DeBenedictis – who has written posts on BKD Forensics.


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