Tuesday, May 02, 2006, 5/02/2006 09:04:00 AM

Sweet Injunction in Texas Trade Secrets Case (Pacer Req'd)

An interesting ruling from the United States District Court for the Southern District of Texas in Zinco-Sherman, Inc. v. Adept Food Solutions, Inc., 2006 WL 11061917 (S.D. Tex. Apr. 21, 2006). Plaintiff and defendant worked together for many years to develop, blend and test a proposed reduced sugar product known as REPLACE. After the relationship faltered, Plaintiff claimed Defendant was threatening to misappropriate its trade secrets.

The court found that Plaintiff could likely show the information at issue -- formula for the product, including the ingredients and their amounts -- constituted trade secrets. Importantly, the "work and time required are evidence of the difficulty others would have in acquiring the information, and the evidence showed that reverse-engineering was not practically available." Moreover, "[a]lthough the parties did not execute a written confidentiality or noncompete agreement, Texas law does not require a formal written confidentiality agreement to establish a confidential or fiduciary relationship."

Thus, the case presents the relatively rare circumstance where a court grants a preliminary injunction in the absence of a formal written confidentiality agreement.

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