Doing Business in Texas: Intellectual Property

Picture of Schuyler "Rocky" Reidel

Schuyler "Rocky" Reidel

Schuyler is the founder and managing attorney for Reidel Law Firm.

Doing Business in Texas: Intellectual Property

Intellectual property is an integral part of many businesses and certainly for startups and franchisors in Texas. Texas developed great protections for businesses and their intellectual property. These protections include trademark and service mark registration, unfair competition laws, among other protective laws such as prosecution for trade secret violations.

Trade and service mark registration serve as notice that the registrant claims rights in the mark and provides prima facie proof of ownership, validity, and the exclusive right to use the mark in Texas. Trade and service marks may be registered with the Secretary of State. The registration is for ten (10) years and is renewable for successive ten year periods after. Trademark infringement is one of several causes of action under the umbrella of unfair competition. With a registered trade or service mark any infringement entitles the registrant to damages and injunction.

A similar legal protection as trademark infringement is called passing off. Passing off occurs when a producer misrepresents his goods or services as someone else’s. Reverse passing off is when your own goods and services are misrepresented as others’. This protection, coupled with trademark infringement, offer great protection for a business and their IP. Where trademark infringement protects the exclusive right to use a mark to identify goods or services, businesses can protect the physical image and name of the good or service under passing off. This can be an invaluable cause of action for importers and exporters based in or with contracts under Texas law.

Another action under unfair competition laws in Texas is trade secret misappropriation. In Texas, any person or entity doing business can keep trade secrets. A trade secret is defined as any scientific or technical information, design, process, procedure, formula, or improvement that (1) has value and (2) the owner has taken measures to prevent from becoming available to persons other than those selected by the owner for limited purposes. Texas provides civil and criminal remedies for misappropriations of trade secrets. It is a third-degree felony in Texas for a person o knowingly steal a trade secret, make a copy of an article representing a trade secret, or communicates a trade secret without consent. Texas also will uphold contractual non-disclosure agreements of employees who have access to trade secrets under the course of their employment.

In Texas, ownership of inventions made by employees are are generally the property of the employer. If the invention was made outside of the scope of employment and not subject to a contractual agreement to assign the employee may retain the rights of ownership. If this is the case, the employer will still have a right to a royalty free license to use any invention of employees made on the employer’s time or with the employer’s facilities and materials.

Intellectual property considerations are very important for any business. As you grow and strengthen your brand, be sure to keep your IP guarded. For help with trademarking your brand or other IP issues, call Reidel Law Firm at (832)510-3292 or use the contact form below.