More Lessons from Title Source v. HouseCanary

Article By Heath Coffman 

Title Source, Inc. v. HouseCanary, Inc., No. 04-19-00044-CV, 2020 WL 2858866 (Tex. App.–San Antonio  June 3, 2020, pet. granted) is a new case addressing the jury charge in Texas Uniform Trade Secrets Act (TUTSA) cases.  In my previous post about the case,  I discussed the Casteel problem in the misappropriation instructions that resulted in reversalof this multi-million dollar judgment.  (For a complete discussion of the facts, please see this previous blog post.)  The court, however, addressed more than the just the misappropriation question.

Another question the court addressed was whether HouseCanary’s information at issue–the AVMs, similarity score, data dictionary, data compilation, and complexity score–constituted a trade secret.  The court determined that HouseCanary had taken reasonable measure to keep this information a secret, citing HouseCanary’s contracts that restricted the use of the information and HouseCanary’s resistance to providing more information to TSI.  The court further rejected TSI’s argument that the information was not a secret because HouseCanary had publicly disclosed eight exhibits at trial.  The court said such disclosure, which occurred more than a year after the alleged misappropriation, did not conclusively prove that HouseCanary did not take reasonable measures to protect its trade secrets.

Next, the Court determined that the evidenced supported a finding that HouseCanary’s information had independent economic value from not being generally known or readily ascertainable through proper means.  As explained by the court:

[T]he jury heard evidence about HouseCanary’s development of each trade secret, how those trade secrets built on each other to help HouseCanary develop its products, and why HouseCanary was reluctant to share the data and analytics underlying those trade secrets. It also heard evidence of difficulties TSI experienced while trying to create similar products. Finally, the jury saw multiple internal TSI documents showing TSI intended to use HouseCanary’s data to develop its own products and believed having access to the data and analytics underlying HouseCanary’s products would help it do so.

The Court also addressed HouseCanary’s ownership of the trade secrets and determined that TSI had waived any issue on the broad form jury charge on this question by failing to properly object.

Overall, TitleSource provides a good example of the type of evidence sufficient to establish the existence of a trade secret under TUTSA

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