How a Trade Secret Lawsuit Unfolds: TRO, Expedited Discovery and Sealing

The two speeds of a trade secret case

Trade secret litigation has a shape that other business cases do not. Because the harm is the loss of secrecy and secrecy cannot be restored by a judgment years later, the Texas Uniform Trade Secrets Act and the federal Defend Trade Secrets Act both allow injunctions against actual or threatened misappropriation, and the rules of procedure let a plaintiff ask for one within days of filing. The first four to eight weeks therefore move at a pace that surprises owners used to slow commercial disputes, and they produce the evidence, the court's first impressions and often the settlement terms.

After the temporary injunction ruling, the case becomes a conventional lawsuit on the merits, with the same discovery, experts, motions and trial setting as any contract or fiduciary case. This article follows the sequence in a Texas state court, notes where federal court differs, and points to the companion articles that cover the injunction standard and damages in depth.

Before filing: preservation, investigation and the choice of letter or suit

The case begins before the petition. The owner preserves its own evidence, sends a written preservation demand to the former employee and the new employer, and has a forensic examiner image the departing employee's company devices and pull access logs before anyone touches them. That investigation, and its legal limits, has its own article in this library.

Counsel then decides whether to send a demand letter or to file at once. A letter resolves many cases and creates a record of notice. It also warns the recipient, who may delete files or move them. Where the evidence shows active copying or imminent use, filing first and asking the court to order preservation is the usual choice.

Filing and the temporary restraining order

The petition pleads the trade secret claim under chapter 134A of the Civil Practice and Remedies Code, usually with breach of contract, breach of fiduciary duty or duty of loyalty, and any non-compete or non-solicitation claim. With it comes a verified application for a temporary restraining order and a temporary injunction, supported by affidavits and the forensic findings.

Under Texas Rule of Civil Procedure 680, a TRO may be granted without notice to the other side only if specific facts in an affidavit or verified petition clearly show that immediate and irreparable injury will result before notice can be served and a hearing held, and the applicant's attorney certifies the efforts made to give notice. The order must state why it was granted without notice, must set the temporary injunction hearing at the earliest possible date, and expires by its own terms within not more than 14 days unless the court extends it for a like period for good cause or the restrained party consents to a longer extension; only one extension is allowed without consent. Rule 684 requires the applicant to post a bond. Federal Rule of Civil Procedure 65 follows the same pattern: a 14-day order, one extension for a like period, security, and specific terms.

Early TROs typically order the defendant not to use or disclose the identified information, to preserve all devices and accounts, and to return company property. They do not decide the case, and a court that grants one ex parte will hear the defendant within days. The standard the court applies at the next stage is explained in getting an emergency injunction to stop trade secret misuse.

Keeping the secret secret: protective orders and sealing

A trade secret plaintiff has to describe what it is protecting, and it has to do so in a public court. Section 134A.006 of the Act is the answer. The court shall preserve the secrecy of an alleged trade secret by reasonable means, and there is a presumption in favor of granting protective orders. The listed tools are provisions limiting access to confidential information to attorneys and their experts, in camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose the alleged secret without prior court approval. The 2017 amendment added the factors a court weighs before excluding a party itself from seeing the other side's secret, including whether the party's representative acts as a competitive decision maker.

Texas Rule of Civil Procedure 76a sets the general rule that court records are open and may be sealed only on a showing of a specific, serious and substantial interest that outweighs the presumption of openness, after public notice and a hearing. Section 134A.007(c) provides that where the Act conflicts with the Rules of Civil Procedure, the Act controls, so the Act's presumption in favor of protection governs trade secret materials. In practice the parties agree on a two-tier protective order in the first weeks, with an attorneys'-eyes-only tier for the secret itself, and file the detailed description under seal. The broader subject is covered in keeping a business dispute confidential.

Expedited discovery and forensic imaging

Ordinary discovery in Texas does not begin until after the initial disclosures and runs on a schedule of months. A trade secret plaintiff needs to know before the injunction hearing what was taken and where it went, so the application asks the court to order expedited discovery: a short set of document requests and interrogatories with a response time measured in days, one or two depositions, and, most importantly, a forensic protocol.

The protocol is an agreed or court-ordered procedure under which a neutral examiner images the defendant's personal devices and cloud accounts, searches them for the plaintiff's files using agreed terms and hash values, and reports the results to counsel without exposing the defendant's unrelated private data. It is usually the single most consequential event of the early case. An image that shows the files, their copy dates and their onward transfer to a new employer's systems changes the hearing; an image that shows nothing often ends the case. Defendants who delete data after the preservation demand face spoliation sanctions, up to an instruction that the jury may presume the missing data was unfavorable to them.

Identifying the trade secret with reasonable particularity

Defendants' first substantive move is to demand that the plaintiff say exactly what the trade secrets are. Courts require the plaintiff to identify them with enough particularity to separate them from general knowledge and from information the defendant lawfully possesses, and to let the court frame an order that can be obeyed. A list that says customer information, pricing and methods will not do; a list that identifies the specific customer database fields, the specific pricing model and the specific process documents will.

The identification is produced under the protective order, often before the defendant must produce its own documents on the secrets, and it tends to be amended as discovery reveals what was actually taken. Plaintiffs who overclaim at this stage, naming as secrets things that are public or that the defendant can show it knew independently, lose credibility with the court and expose themselves to the bad-faith fee provision of section 134A.005.

The temporary injunction hearing and the interlocutory appeal

The temporary injunction hearing is a trial in miniature, held within weeks of filing. Witnesses testify, the forensic examiner is often among them, and the court decides whether to keep the defendant restrained until the final trial. The order, under Rule 683, must state its reasons, describe the restrained acts in reasonable detail and set the case for trial on the merits. A bond is set for the injunction as well.

Either side may appeal at once. Section 51.014(a)(4) of the Civil Practice and Remedies Code allows an interlocutory appeal from an order that grants or refuses a temporary injunction or that grants or overrules a motion to dissolve one. The appeal does not stay the case in the trial court, and the court of appeals reviews for abuse of discretion, so most temporary injunctions that rest on evidence and are specific enough survive, while orders that bar a profession or restrain general knowledge are reversed. Appellate practice is covered in appealing a business case in Texas.

The merits phase: discovery, experts, summary judgment and trial

With the temporary injunction decided, the case slows. Full written discovery and depositions follow, now reaching the defendant's business records, the new employer's systems and the plaintiff's own measures to protect the information. Experts appear on both sides: forensic examiners on what was taken, industry experts on whether it was secret and valuable, and damages experts on lost profits, unjust enrichment or a reasonable royalty, the measures explained in damages in trade secret cases.

Summary judgment motions test whether the information meets the statutory definition and whether the plaintiff took reasonable measures. Trial, before a jury if either side has requested one, decides misappropriation, damages, whether the conduct was willful and malicious, and the fee grounds. The court then enters a permanent injunction, which under section 134A.003 lasts until the secret ceases to exist plus a reasonable period to eliminate the head start, and judgment for damages. Cases in federal court under the Defend Trade Secrets Act follow the same sequence under the federal rules, with the main difference in the preliminary injunction standard and the court's calendar.

Example

Suppose a Dallas engineering firm learns on a Monday that a project manager who resigned the previous week has joined a competitor and that his company laptop shows a mass copy to a USB drive two days before he left. By Wednesday a forensic examiner has imaged the laptop and preserved the logs; counsel has sent preservation letters to the manager and the competitor. On Friday the firm files in Dallas County under TUTSA with contract and fiduciary claims, and obtains a TRO barring use or disclosure, requiring preservation and ordering the manager to produce the USB drive and his personal devices for imaging under a protocol. The parties agree to a two-tier protective order the following week and the firm files its identification of the secrets under seal: the bid templates and cost models for three named project types. The forensic report finds the files on the drive and a copy in the competitor's cloud. At the temporary injunction hearing three weeks after filing, the court enjoins both defendants from using the identified files, orders their deletion under supervision and sets trial in a year. The competitor does not appeal. The case settles after the damages expert's report, on terms that include a consent permanent injunction. Most of what mattered happened in the first month.

What the business should plan for

• Management time. The first weeks require the owner, IT and the people who know the information to be available on short notice for affidavits, testimony and the identification of secrets.
• Confidentiality discipline. The protective order binds both sides; the plaintiff will also see the defendant's information under it.
• Cost concentration. The expense is front-loaded into the injunction phase and the forensic work; a case that settles after the hearing costs a fraction of one that goes to trial.
• Relationships. Customers and the new employer are drawn in as witnesses. How the plaintiff communicates with them during the case matters legally and commercially.

Tina Wysk represents Dallas companies and individuals on both sides of trade secret cases in state and federal court; the practice is described at trade secret litigation.