​Don't Steel That: HBC Obtains Summary Judgment in Trade Secret Case

Harper Bates & Champion partner Austin Champion and associate Ben Jones recently obtained summary judgment in a trade secret case involving two steel rebar construction competitors.

Champion initially filed suit and obtained a temporary restraining order on behalf of his client—a civil rebar construction company—when a former employee allegedly took confidential and proprietary bidding materials to a competitor, which then used the materials to calculate competitive bids for rebar subcontractor projects.

The competitor was ordered to destroy the documents by the court. After HBC obtained a temporary injunction against the defendants, the competitor filed a counterclaim seeking to recover attorneys' fees from the plaintiff, alleging the continued pursuit of its claims for trade secret misappropriation was in bad faith in light of the court's temporary injunction.

Based on publicly reported decisions, it appears this case is the first time the bad faith provision of the Texas Uniform Trade Secret Act has been interpreted by a Texas court.

The competitor sought an award of attorneys’ fees claiming HBC’s client acted in bad faith for continuing to prosecute a claim for trade secret misappropriation after obtaining temporary injunctive relief. HBC argued, among other things, that its client remained entitled to an award of damages, attorneys' fees, and permanent injunctive relief, which rendered continued pursuit of its claims for misappropriation not in bad faith as a matter of law.

Champion and Jones also moved for summary judgment on the ground that the competitor’s counterclaim was predicated on a false factual statement—defendants’ alleged compliance with the Court's temporary injunction.

The Court agreed with HBC's client, granted summary judgment, and dismissed the defendants' counterclaim for attorneys' fees with prejudice to refiling same.

Champion and Jones have moved for sanctions and an order finding the defendants in contempt of court in connection with the defendants' alleged violations of the Court's temporary injunction. That motion is currently set for hearing on April 23, 2018.

The case is currently set for trial in the Fall of 2018.