Protecting Your Business From Employee Intellectual Property Theft
When an employee walks out the door with your trade secrets, customer lists, or proprietary designs, it’s a direct threat to your business. If you suspect a current or former employee has stolen intellectual property, you need to act quickly. Time matters in these cases because evidence can disappear, and the damage to your business can spread fast.
You need to protect your company’s most valuable assets, and you need a law firm that can help you do that. Whether you’re dealing with stolen customer data, copied software code, or an employee who left to compete using your confidential information, understanding your options is the first step toward protecting what you’ve built.
At Roger G. Jain & Associates, PC, our Houston business lawyers can protect your business from employee intellectual property theft. With decades of experience working with businesses throughout Texas, our team is ready to help you. Learn more about our firm.
Roger G. Jain & Associates, P.C. can be found at 9301 Southwest Freeway, Suite 250, in Merlyn Plaza. We are right off I-69 and easy to reach from anywhere in the Houston metro area. Contact us online or call our law firm at 713-981-0600.
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What Counts as Employee IP Misappropriation?
Intellectual property theft by employees takes many forms. The most common scenarios we see involve trade secrets in manufacturing processes, business strategies, pricing models, or customer databases that give your business a competitive edge. When an employee takes this information to use for themselves or a competitor, it’s actionable.
Other frequent cases include:
- Employees copying proprietary software, designs, or technical specifications before leaving
- Workers downloading customer lists or sales data to their personal devices
- Staff members taking confidential financial information or business plans
- Employees using your company’s copyrighted materials or patented processes without permission
The key factor is whether the employee had authorized access to the information and then used it improperly. An employee might legitimately work with sensitive data during their employment, but taking it when they leave or sharing it with outsiders crosses the line into misappropriation.
Your Legal Rights as a Houston Business Owner
You have several powerful legal remedies available when employees steal intellectual property. The strongest is often a claim under trade secret laws, which exist at both the federal level (the Defend Trade Secrets Act) and in every state, including Texas. These laws allow you to sue for damages and, critically, to get immediate court orders stopping the employee from using or sharing your confidential information.
Beyond trade secret claims, you may have breach of contract claims if the employee signed a non-disclosure agreement, non-compete agreement, or employment contract with confidentiality provisions. These contracts give you additional grounds to pursue legal action and often make it easier to prove your case.
Copyright and patent infringement claims may also apply if the employee took protected creative works or used your patented inventions. In some situations, you might have claims for breach of fiduciary duty, especially if the employee held a position of trust, like a manager or executive.
What You Can Recover
The financial impact of IP theft can be devastating, but the law provides several ways to make your business whole. You can recover the actual damages you suffered, like lost profits, lost customers, or decreased business value. If the employee or their new employer profited from using your IP, you can often recover those profits too.
Perhaps most importantly, you can get injunctive relief, which means that the court orders that the court immediately stop the employee from using your IP and require them to return or destroy any stolen materials. In many cases, this injunction is the most valuable remedy because it stops ongoing damage to your business while the lawsuit proceeds.
For willful and malicious misappropriation, courts may award exemplary damages up to twice compensatory damages and attorneys’ fees.
Protecting Yourself Going Forward
Prevention is always better than litigation. Strong employment agreements with clear confidentiality provisions, non-compete clauses, and assignment of inventions clauses create a legal framework that deters theft and makes prosecution easier.
Regular audits of who has access to sensitive information, monitoring of data downloads and emails, and exit procedures that include device checks and a reminder of confidentiality obligations all reduce risk. Employee training about what information is confidential and the consequences of misappropriation also helps.
When employees do leave, conducting exit interviews, disabling access immediately, and monitoring for signs they’ve joined competitors or started competing businesses can help you catch misappropriation early when it’s easiest to stop.
Contact Our Houston Business Defense Lawyers
If you believe an employee has stolen your intellectual property, consultation with an experienced Houston business litigation attorney should be your next step. These cases move fast, and the decisions you make in the first days and weeks can determine whether you recover your IP and protect your business.
At Roger G. Jain & Associates, PC, our lawyers will immediately assess what legal claims you have, what evidence you need to preserve, and whether emergency court action is necessary. We can also handle cease and desist letters, negotiate settlements, or file lawsuits, depending on what your situation requires.
Your business’s competitive advantage and financial future may depend on taking action now. Call 713-981-0600 or fill out our confidential contact form to schedule a risk-free, no-obligation consultation.