Trade secrets provide competitive advantages but must be treated correctly to be protected.
Trade Secret Defined
Although Texas has long protected trade secrets under common law, in 2013 Texas adopted the Uniform Trade Secrets Act (“UTSA” known in Texas as “TUTSA”). TUTSA’s definition of “trade secret” can be summarized as any secret information that does, or might, provide economic value and reasonable steps are taken to maintain the secret.
A more expanded definition of “trade secret” is:
It’s common for business owners to think “I don’t have any ‘trade secrets” because I’m just a [fill in the blank] business.” But on closer look at the the trade secret definition it’s more likely that most businesses do have information that is not known by their competition that provides them with a competitive advantage (whether the information is a list of actual or potential customers or suppliers, procedures, or financial data).
Reasonable steps must be taken to protect this information in order for it to fit the definition of trade secret and, consequently, be enforceable under TUTSA.
(background photo by Anna Shvets from Pexels)