Are Data and Modeling Trade Secrets?

Originally published by Brent Perry.

 

What is a trade secret? Companies and their lawyers grapple with this question when tasked with defending confidential information. Unlike patents or trademarks, which must be approved by the U.S. Patent and Trademark office, the trade secret question is more amorphous. Last year, a Bexar County jury found that data-driven valuation models and methods, delivered in app form, deserved trade secret protection when it entered a $706 million verdict in favor of a startup named HouseCanary.

HouseCanary alleged that its client, Amrock, stole its trade secret models. Amrock responded that HouseCanary’s trade secrets were nothing more than publicly available information the company analyzes to get certain results. The larger question in this lawsuit is when data and modeling can be considered a trade secret. While a jury decided in HouseCanary’s favor, it will be left for an appeals court to determine whether the jury’s decision should stand.

The case, Title Source, Inc. v. HouseCanary, Inc., f/k/a Canary Analytics, Inc., is currently on appeal to the Fourth Court of Appeals in Bexar County, Texas

Implications for Businesses

The Uniform Trade Secrets Act provides protection to individuals and businesses that rely on trade secrets for their success. In 2013, Texas adopted the Uniform Trade Secrets Act to provide better protection to Texas businesses. While the Texas Uniform Secrets Act provides a base line definition of a “trade secret,” the courts have further refined what information can be protected. With no explicit answer regarding whether or not data can be a trade secret, businesses relying on data and models will need the help of experienced attorneys to protect their trade secrets.

Houston Trade Secrets Attorneys

At Burford Perry LLP, our Houston trade secrets attorneys are experienced at handling complex and difficult trade secret matters. We can help you put a stop to trade secret violations and seek compensation for the economic impact of violations. Contact us today to schedule an appointment with one of our attorneys.

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Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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