85R11430 SCL-F     By: Hughes S.B. No. 1945       A BILL TO BE ENTITLED   AN ACT   relating to the Texas Uniform Trade Secrets Act.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 134A.002, Civil Practice and Remedies   Code, is amended by adding Subdivisions (1-a), (3-a), and (7) and   amending Subdivisions (3), (4), and (6) to read as follows:                (1-a) "Clear and convincing" means the measure or   degree of proof that will produce in the mind of the trier of fact a   firm belief or conviction as to the truth of the allegations sought   to be established.                (3)  "Misappropriation" means:                      (A)  acquisition of a trade secret of another by a   person who knows or has reason to know that the trade secret was   acquired by improper means; or                      (B)  disclosure or use of a trade secret of   another without express or implied consent by a person who:                            (i)  used improper means to acquire   knowledge of the trade secret;                            (ii)  at the time of disclosure or use, knew   or had reason to know that the person's knowledge of the trade   secret was:                                  (a)  derived from or through a person   who used [had utilized] improper means to acquire the trade secret   [it];                                  (b)  acquired under circumstances   giving rise to a duty to maintain the [its] secrecy of or limit the   [its] use of the trade secret; or                                  (c)  derived from or through a person   who owed a duty to the person seeking relief to maintain the [its]   secrecy of or limit the [its] use of the trade secret; or                            (iii)  before a material change of the   position of the person [person's position], knew or had reason to   know that the trade secret [it] was a trade secret and that   knowledge of the trade secret [it] had been acquired by accident or   mistake.                (3-a)  "Owner" means, with respect to a trade secret,   the person or entity in whom or in which rightful, legal, or   equitable title to, or the right to enforce rights in, the trade   secret is reposed.                (4)  "Proper means" means discovery by independent   development, reverse engineering unless prohibited, or any other   means that is not improper means.                (6)  "Trade secret" means all forms and types of   information, including business, scientific, technical, economic,   or engineering information, and any [a] formula, design, prototype,   pattern, plan, compilation, program device, program, code, device,   method, technique, process, procedure, financial data, or list of   actual or potential customers or suppliers, whether tangible or   intangible and whether or how stored, compiled, or memorialized   physically, electronically, graphically, photographically, or in   writing if [that]:                      (A)  the owner of the trade secret has taken   reasonable measures under the circumstances to keep the information   secret; and                      (B)  the information derives independent economic   value, actual or potential, from not being generally known to, and   not being readily ascertainable through [by] proper means by,   another person [other persons] who can obtain economic value from   the [its] disclosure or use of the information [; and                      [(B)     is the subject of efforts that are   reasonable under the circumstances to maintain its secrecy].                (7)  "Willful and malicious misappropriation" means   intentional misappropriation resulting from the conscious   disregard of the rights of the owner of the trade secret.          SECTION 2.  Section 134A.003, Civil Practice and Remedies   Code, is amended by amending Subsection (a) and adding Subsection   (a-1) to read as follows:          (a)  Actual or threatened misappropriation may be enjoined   if the order does not prohibit a person from using general   knowledge, skill, and experience that person acquired during   employment.          (a-1)  On application to the court, an injunction shall be   terminated when the trade secret has ceased to exist, but the   injunction may be continued for an additional reasonable period of   time in order to eliminate commercial advantage that otherwise   would be derived from the misappropriation.          SECTION 3.  Section 134A.004(b), Civil Practice and Remedies   Code, is amended to read as follows:          (b)  If willful [wilful] and malicious misappropriation is   proven by clear and convincing evidence, the fact finder may award   exemplary damages in an amount not exceeding twice any award made   under Subsection (a).          SECTION 4.  Section 134A.005, Civil Practice and Remedies   Code, is amended to read as follows:          Sec. 134A.005.  ATTORNEY'S FEES.  The court may award   reasonable attorney's fees to the prevailing party if:                (1)  a claim of misappropriation is made in bad faith;                (2)  a motion to terminate an injunction is made or   resisted in bad faith; or                (3)  willful [wilful] and malicious misappropriation   exists.          SECTION 5.  Section 134A.006, Civil Practice and Remedies   Code, is amended to read as follows:          Sec. 134A.006.  PRESERVATION OF SECRECY.  (a) In an action   under this chapter, a court shall preserve the secrecy of an alleged   trade secret by reasonable means. Notwithstanding any other law,   including Rule 76a, Texas Rules of Civil Procedure, the court may   seal court records. There is a presumption in favor of granting   protective orders to preserve the secrecy of trade secrets.   Protective orders may include provisions limiting access to   confidential information to only the attorneys and their experts,   holding in camera hearings, sealing the records of the action, and   ordering any person involved in the litigation not to disclose an   alleged trade secret without prior court approval.          (b)  In an action under this chapter, a presumption exists   that a party is allowed to participate and assist counsel in the   presentation of the party's case. At any stage of the action, the   court may exclude a party and the party's representative or limit a   party's access to the alleged trade secret of another party if other   countervailing interests overcome the presumption. In making this   determination, the court must conduct a balancing test that   considers:                (1)  the value of an owner's alleged trade secret;                (2)  the degree of competitive harm an owner would   suffer from the dissemination of the owner's alleged trade secret   to the other party;                (3)  whether the owner is alleging that the other party   is already in possession of the alleged trade secret;                (4)  whether a party's representative acts as a   competitive decision maker;                (5)  the degree to which a party's defense would be   impaired by limiting that party's access to the alleged trade   secret;                (6)  whether a party or a party's representative   possesses specialized expertise that would not be available to a   party's outside expert; and                (7)  the stage of the action.          SECTION 6.  Chapter 134A, Civil Practice and Remedies Code,   as amended by this Act, applies only to an action that commences on   or after the effective date of this Act. An action that commences   before the effective date of this Act is governed by the law   applicable to the action immediately before the effective date of   this Act, and that law is continued in effect for that purpose.          SECTION 7.  This Act takes effect September 1, 2017.