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Monday, March 16, 2015

Supreme Court of Texas Denies Review in Beirne Maynard & Parsons Trade Secret Case

On Friday March 13, 2015 the Supreme Court of Texas denied review in Lamont, et al. v. Vaquillas Energy Lopeno, Ltd., et al., Case No. 14-0034 a trade secret case involving misappropriation of a seismic map.

BMP clients Vaquillas Energy Lopeno, Ltd. and JOB Energy Partners II, Ltd. had sued Thomas Lamont and Rosendo Carranco for misappropriation of a trade secret seismic map depicting a gas reservoir estimated to contain between $40 and $60 million in reserves.  In 2010, a Webb County, Texas jury found that Lamont and Carranco had used improper means to acquire the map, conspiring to do so, and awarded Vaquillas and JOB a combined $4.9 million in lost profit damages.   In 2013, the Fourth Court of Appeals at San Antonio affirmed the judgment.  In denying review, the Supreme Court’s decision leaves intact the $4.9 million judgment.

The case was precedent-setting in trade secret law in three respects.

First, the Court of Appeals held that a trade secret disclosed for one purpose may not be used by the disclosee for another purpose.

Second, the Court of Appeals held that a former employee has a continuing duty to protect trade secret information of his former employer.  Texas law has long held that former employees are forbidden from using trade secret information acquired during the employment in a manner adverse to the former employer.  This case extends the doctrine to impose a duty to protect such secret information by not disclosing it to others.

Third, the Court of Appeals held that disclosure of a trade secret to another investor, without obtaining a confidentiality agreement, does not automatically destroy its status as a trade secret.  “Trade secret status is not destroyed by showing the protected item to prospective buyers, customers, or licensees.”

Friday’s ruling by the Supreme Court of Texas leaves these significant rulings intact.  The Court of Appeals’ decision is Lamont v. Vaquillas Energy Lopeno, Ltd., No. 04-12-00219-CV (December 11, 2013).

Beirne Maynard attorneys involved in the appeal were Jeff Parsons, Joe Cohen, and Nicholas Stepp.


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