A Texas Court of Appeals reversed a jury verdict in the amount of $740 million that was awarded to a company whose trade secrets were allegedly misappropriated under the Texas Uniform Trade Secrets Act. The party who prevailed at trial, HouseCanary, had been hired by TSI to build an iPad application. TSI was prohibited from reverse-engineering or otherwise figuring out HouseCanary’s confidential and proprietary information.
After it appeared that TSI had violated the parties’ contract, TSI claims that HouseCanary also breached the contract, presumably for failure to pay though TSI did not deliver data that it had promised to deliver. TSI filed a lawsuit against HouseCanary, and HouseCanary filed a counterclaim against TSI. A jury found in HouseCanary’s favor on its claims of misappropriation and fraud.
TSI appealed the judgment on the basis that the jury was given overly broad instructions, making it unclear whether the jury had really found that all elements of the misappropriation claim were met. Specifically, the jury was told that misappropriation could include “acquisition by improper means” even though that could have included means that were outside the scope of the lawsuit. Similarly, the appellate court said it could not determine the theory of liability upon which the jury based its verdict on the claim of fraud. Accordingly, the appellate court ordered a new trial on both the misappropriation and the fraud claims.
This Texas Court of Appeals decision emphasizes the importance of retaining lawyers who are well practiced in business litigation. Since many cases settle before trial, not all attorneys fully grasp the importance of jury instructions, which require a strong understanding of the elements of each claim alleged. If a company feels that an employee or another company misappropriated its trade secrets or otherwise committed some wrong against it, it may be a good idea to consult with an attorney with business law experience.