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Texas Trade Secret Protection Laws

A relatively recent development in the United States is the adoption of the UTSA, the Uniform Trade Secrets Act, which has been adopted by approximately 46 states as the basis for trade secret law. Another significant development in U.S. law is the Economic Espionage Act of 1996 (18 U.S.C. § 1831–1839), which makes the theft or misappropriation of a trade secret a federal crime.  This law contains two provisions criminalizing two sorts of activity.  The first, 18 U.S.C. § 1831(a), criminalizes the theft of trade secrets to benefit foreign powers.  The second, 18 U.S.C. § 1832, criminalizes their theft for commercial or economic purposes. (The statutory penalties are different for the two offenses.).

Texas Common Law of Trade Secrets

Notably, Texas has not adopted the UTSA, and instead relies solely on the "common law" prior court decisions in the state.  Under Texas law, misappropriation of a trade secret consists of use or disclosure of a trade secret that was acquired through a relationship of trust, or through fraud or other improper means.  Texas courts can issue an injunction and order a defendant to pay economic damages if a plaintiff is successful in litigation.  Texas also allows for criminal penalties for theft of a trade secret, which is considered a third degree felony. See Tex. Penal Code Ann. § 12.34