Business Litigation / 2 min read
On October 30, 2025, the Texas Fourteenth Court of Appeals issued an interesting decision in Teligistics, Inc. v. Advanced Personal Computing, Inc. that teaches two valuable lessons. First, an employer should never assume that what it believes to be a “trade secret” is in fact a “trade secret” as defined by the Texas Uniform Trade Secrets Act (“TUTSA”). Second, a prevailing defendant has an extremely high threshold to prove a plaintiff acted in bad faith in prosecuting a TUTSA claim.
The Facts
Teligistics is a telecom company that assists clients with selecting vendors to handle their telecommunication-service needs. It utilizes a formal bidding process that it contended contained trade secret information about ongoing projects. Teligistics, Inc. sued Advanced Personal Computing, Travis Wood, and Robert Short seeking injunctive relief and damages under TUTSA claiming they misappropriated specific project information (the so-called “NRG Print Out.”)
Don’t Assume Every Stolen Document is a Trade Secret
Teligistics lost at trial because the jury concluded the NRG Print Out was not a trade secret. Teligistics likely made the fatal error of assuming that any information an employer misappropriates will be deemed a trade secret. But proving something qualifies as a trade secret is not so simple as saying: it must have value, otherwise the employee would not have taken it. Under TUTSA, a “trade secret” means information, e.g., business, technical, economic, or engineering, and any plan, compilation, program, code, method, technique, process, or procedure that—
- derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
- is the subject of reasonable measures by the owner under the circumstances to maintain its secrecy.
At trial, the Defendants offered evidence that the NRG Print Out had no independent economic value and was a compilation of publicly available information. This was good enough to support the jury verdict and affirm the judgment in favor of the Defendants.
Bad Faith is a high threshold
Not everything went the Defendants’ way. At trial, the jury found Teligistics brought the TUTSA claim in bad faith and awarded Defendants their attorney’s fees. On appeal, the court reversed and found that Defendants had failed to prove bad faith. The attorneys fees award was taken away. The court noted that “bad faith” means an impermissible motive, willful ignorance of facts that conclusively negate the claim, or willful noncompliance. The fact that the Defendants’ defeated Teligistics claim did not automatically create a right to recover attorney’s fees under TUTSA. Likewise, simple errors and litigation choices that proved unsuccessful are not proof of bad faith. For example, Teligistics made last minute strategic decisions to dismiss their claims against two defendants just before trial started. Still not enough to prove bad faith.
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