Criminal Trade Secret Theft Cases Against Judgment Proof Defendants in Texas and California

Abstract

Trade secret theft is a costly and ongoing risk to many businesses. As the two most populous states, California and Texas are home to numerous businesses that own trade secrets. Although civil remedies afford one source of relief when a trade secret has been stolen or disclosed, collecting on a judgment may be impossible due to the Homestead laws in both states, which effectively render the defendants judgment proof. In such cases, another alternative is to consider a criminal prosecution under the federal Economic Espionage Act or state law. The same misconduct that results in civil liability can also violate criminal laws. However, because federal prosecutors have so far shown minimal interest in pursuing cases that do not involve a foreign government or agent, a prosecution under state criminal trade secret theft statutes should be considered. This Article discusses how California and Texas trial and appellate courts have applied theses statutes so that businesses can better consider this alternative.

Keywords: Trade Secrets, Intellectual Property, Economic Espionage Act, California Law, Texas Law

JEL Classification: K11, K14, K22