Texas Gold and Trade Secrets

Southwest Energy Company recently found itself in the cross hairs of a trade secret dispute.  It seems that a pair of geologists and an engineer created a detailed study of the drilling and fracing opportunities in East Texas.  The team had identified 10 “sweet spots” for development and had begun leasing the targeted acreage so that a plan ready for drilling could be supplied to the highest bidder. 

Apparently, Southwest Energy met with the trio and signed a confidentiality agreement.  After reviewing the information and the proposal, Southwest declined to purchase the drill-ready plan.  However, a year later, Southwest Energy purchased large amounts of acreage in and around the identified “sweet spots.”  The geologists and engineer found this too coincidental and brought an action for theft of trade secrets. 

A Texas court agreed with the trio and awarded a judgment of 40.2 million dollars.  On appeal, the judgment was reduced to 11.4 million for lost profits.  The case is currently pending before the Texas Supreme Court. 

What’s the take away here? Regardless of your industry-protect your confidential information.  It may be a supplier list, a pricing structure, or a manufacturing technique.  Use the tools available to maintain these company secrets.  Whether it is in the form of a confidentiality agreement, restricting physical access within your site, or conducting periodic training sessions to remind employees of the value of certain information, keep ahead of any potential leak.  Once a trade secret has been disclosed, you cannot get it back. 

Protecting proprietary information is critical to any organization.  Having the right person to help you make those decisions is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.