Texas Penal Code 31.05 – Theft of Trade Secrets

WHAT IS THEFT OF TRADE SECRETS IN TEXAS?

The Texas law against theft of trade secrets prohibits stealing, communicating, or transmitting a trade secret, or making a copy of any object, substance, device, or material revealing a trade secret without the owner’s effective consent.

• What is a trade secret? Texas Penal Code Section 31.05 defines “trade secret” as “any scientific or technical information, design, process, procedure, formula, or improvement that has value and that the owner has taken measures to prevent from becoming available to persons other than those selected by the owner to have access for limited purposes.”Trade secrets are a type of intellectual property, or a creation of the mind, such as custom-made computer programs, invention prototypes, machinery drawings, and other commercially valuable secrets. Texas courts determine whether something is a “trade secret” based on the measures taken to protect the secret, such as employee non-disclosure agreements, security clearances, restricted access, and any other measures.

WHAT IS THE THEFT OF TRADE SECRETS LAW IN TEXAS?

Tex. Penal Code § 31.05. THEFT OF TRADE SECRETS.

(b) A person commits an offense if, without the owner’s effective consent, he knowingly:

(1) steals a trade secret;

(2) makes a copy of an article representing a trade secret; or

(3) communicates or transmits a trade secret.

(c) An offense under this section is a felony of the third degree.

WHAT IS THE PENALTY CLASS FOR THEFT OF TRADE SECRETS IN TEXAS?

Theft of trade secrets is a third degree felony, punishable by two to ten years in prison.

WHAT IS THE PUNISHMENT RANGE FOR THEFT OF TRADE SECRETS IN TEXAS?

Theft of trade secrets, a third degree felony, carries between two to ten years in prison, and a maximum fine of $10,000.

WHAT ARE THE PENALTIES FOR THEFT OF TRADE SECRETS IN TEXAS?

As an alternative to prison, a person is eligible for up to ten years of probation community supervision after a conviction, or up to ten years of deferred adjudication without a conviction.

WHAT ARE THE DEFENSES TO THEFT OF TRADE SECRETS IN TEXAS?

The statute does not authorize specific defenses to theft of trade secrets. A person accused thereof may attempt to negate one of the elements the State must prove at trial.

WHAT IS THE STATUTE OF LIMITATIONS FOR THEFT OF TRADE SECRETS IN TEXAS?

The statute of limitations for theft of trade secrets, a third degree felony, is five years.

THEFT OF TRADE SECRETS IN TEXAS

Theft of trade secrets punishes people for stealing valuable intellectual property the owner has taken measures to protect as a secret.

TEXAS THEFT OF TRADE SECRETS COURT CASES

The case law regarding theft of trade secrets in Texas shows how courts determine whether something is a trade secret.

• In Weightman v. State, the co-defendants, McGowan and Weightman, were convicted of theft of trade secrets after stealing machinery drawings from a company to manufacture their own equipment for profit. On appeal, the defendants argued the drawings were not trade secrets, but the Court of Criminal Appeals disagreed and affirmed. The victim company restricted access to the drawings, had employees sign non-disclosure agreements, and had security at the manufacturing plant. The drawings met trade-secret status.