In March 2018, HouseCanary won a $706M trade secrets verdict against Title Source Inc., a Quicken loans affiliate. After a seven-week jury trial, HouseCanary moved the court to seal fourteen trial exhibits because they purportedly revealed HouseCanary’s trade secrets, although the parties discussed and displayed these fourteen exhibits in open court at trial (they asked witnesses questions about the exhibits, displayed portions of the exhibits in the courtroom, and read portions of the exhibits to the jury). The trial court ultimately ruled to seal the exhibits. Last week, the Fourth Court of Appeals in Texas ruled on appeal that the trial court erred by granting HouseCanary’s motion to seal the exhibits after trial, concluding that the Texas Uniform Trade Secrets Act does not require courts to set aside valid protective orders and that HouseCanary didn’t follow the proper procedure, laid out in Texas Rule of Civil Procedure 76a (and agreed to by the parties in their stipulated protective order), for sealing the documents.
In her concurring opinion, Chief Justice Marion reasoned that when HouseCanary used the exhibits at trial, it was required under the TUTSA to take reasonable measures to keep information secret and it failed to do so by obtaining a separate order or agreement, as mandated by the stipulated protective order. This case illustrates the importance of taking precautions to protect trade secrets during the pendency of legal proceedings by timely seeking and obtaining appropriate court orders to limit the dissemination of the disclosed information, because the failure to do so could result in the loss of trade secret protection.