Legislation

Texas Insiders Say Businesses Champing at the Bit for New Trade Secrets Law to Take Effect

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For decades, Texas was the wild west of trade secrets law, governed by the state’s outdated common law with no trade secrets statute on the books.  That changed May 3 when Governor Rick Perry signed legislation making Texas the 48th state to adopt the Uniform Trade Secrets Act.  The lawyers who helped push the legislation across the goal line are now eagerly focused on September 1, when the new law takes effect.

The common law, or the accumulated body of Texas court decisions on trade secrets, just wasn’t up to the task any more, said Joseph F. Cleveland, Jr., an attorney at the firm Brackett & Ellis, P.C.  Cleveland and a handful of other attorneys on the State Bar of Texas Trade Secret Committee testified before legislative committees as the bill worked its way through the Texas Statehouse. READ MORE →

Time for the White House to Step In? Patchwork State Fracking Regulations Will Spawn FOIA and Trade Secrets Lawsuits

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Revised post available here.

With a growing number of states demanding disclosure of its fracking recipes, the oil and gas industry is fighting to plug what it views as government-mandated leaks in its trade secrets pipeline.

Battles are brewing in state capitals and courts as the industry faces fourteen states (and counting) that now require disclosure of the chemicals they use for fracking (aka hydraulic fracturing), a liquid-based process of drilling and extracting oil and gas from shale rock below ground.  These regulations are intended to allow government agencies to evaluate the environmental and health impacts of fracking.  Some state agencies are mandating disclosure directly to the agency (California is considering this approach), while other agencies are taking a permissive approach and rely on information submitted to an industry-developed registry for fracking.

Once collected by a state agency, the receiving agency can generally disclose corporate fracking information to third parties.  These parties may include doctors in the case of a spill under California’s fracking bill, or any member of the public in response to state freedom of information act (FOIA) requests.  Environmental and public-health groups are advocating for a robust disclosure policy, while oil and gas companies argue that their fracking approaches are trade secrets and READ MORE →

That’s the Way the Consensus Crumbles: CISPA Splits Natural Allies in High-Tech

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Orrick Trade Secrets Watch

If there’s one thing Americans of all political stripes seem to agree on, it’s the need to thwart cyber-attacks on critical U.S. systems.  Just this week, the Pentagon for the first time openly blamed China for hacking U.S. government computer infrastructure.

Yet a bill that would combat cyber attacks by enhancing information-sharing among government agencies and private companies is once again stumbling through Congress, its fate thrown into question by intra-Silicon Valley rivalries and a threatened White House veto.  The Cyber Intelligence Sharing and Protection Act (CISPA) would permit information-sharing about possible cyber-security threats among government agencies and private companies.  The main idea behind CISPA is that expanding the information flow would help disseminate and centralize information that is otherwise fragmented and siloed, which would help halt cyber-attacks.  These attacks pose a threat READ MORE →

New Trade Secret Legislation in France? Mais oui bien sûr!

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If your trade secrets get stolen in France, what protections would you have?  Most U.S. trade secret lawyers don’t have occasion to consider trade secret laws outside the United States, but there’s a whole world beyond the Uniform Trade Secrets Act!  Other countries also recognize the value of trade secrets and have taken steps to protect them.

For the first time in France, the National Assembly adopted a bill aimed at criminal sanctions for trade secret disclosure.  This bill, called the “Proposition de loi visant à sanctionner la violation du secret des affaires,” recognizes that the financial value of a company depends more and more on ideas, know-how, and trade secrets that give companies an edge over their competitors.  The bill imposes penalties of up to three years’ imprisonment, individual fines of up to €375,000 and corporate fines up to €1.875 million for the disclosure of trade secrets.  These penalties aren’t as stiff as the U.S.’s Economic Espionage Act, which was recently amended to increase individual fines up to USD $5 million and corporate fines up to USD $10 million or three times the value of the stolen trade secret to the organization READ MORE →

BREAKING NEWS: Don’t Mess with Texas Trade Secrets: Lone Star State Becomes 48th State to Adopt Uniform Trade Secrets Act

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​In the battle to harmonize trade secret law, Texas was the Alamo—the biggest state to hold out against the rising tide of states adopting the Uniform Trade Secrets Act. But the Lone Star State is an outlier no more. Today Governor Rick Perry signed into law the Texas Uniform Trade Secrets Act, making Texas the 48th State to enact the model statute.

​The measure closely tracks the uniform act that 47 other states have adopted, providing for definitions of “trade secret,” “misappropriation” and “improper means.” The new law makes small tweaks to the uniform act, such as by expressly providing that a “trade secret” can include a “process, financial data, or list of actual or potential customers,” provided other requirements of the statute are met. As in the uniform act, the new law prohibits the unauthorized acquisition, use, and disclosure of trade secrets. It specifies that independent development and authorized reverse engineering are not prohibited. The act also includes the UTSA’s pre-emption clause, expressly providing that it displaces “conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.” This means that the Texas UTSA will READ MORE →

The Real Lesson of Chinese Cyberhacking

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The Real Lesson of Chinese Cyberhacking

There’s been a lot of news lately about the Chinese military allegedly launching cyber attacks to steal U.S. trade secrets.  This has gotten people riled up, including the President of the United States, who issued a 5-point plan for protecting American trade secrets.  The White House called on the public to make suggestions for new federal legislation to combat this growing threat.  (Submissions were due April 22, 2013.)

This is a time of great opportunity to do something big to protect U.S. trade secrets.  Unfortunately, some proposed solutions aren’t taking advantage of this opportunity.  Some industry groups, for example, have suggested adopting new federal trade secret legislation that would not preempt state laws and only cover cases of “international misappropriation,” or only cover misappropriation by or for the benefit of foreign governments, companies, or individuals.

Respectfully, measures of this type don’t address the real issue and aren’t seizing the moment.  The real lesson of Chinese cyberhacking is not that China has hackers targeting America, but that U.S. companies’ trade secrets are READ MORE →