Texas Business Courts Welcome Trade Secret Cases

Texas is aggressively positioning itself as the nation’s trial capital for “bet-the-company” business disputes. On September 1, 2025, the recently created Texas business courts will begin welcoming trade secret and intellectual property cases with newly enacted legislation to streamline these matters. 

Background: Business Courts in Texas

In 2023, Texas established a specialized civil court system — the Texas Business Court — consisting of trial-level divisions across 11 regions and an appellate-level Fifteenth Court of Appeals, the first of its kind in the U.S. These courts became operational in September 2024, with judges appointed (not elected) and supported by dedicated staff, aiming to streamline and deepen expertise in high-stakes business dispute resolution.

Trade Secret Litigation in Texas

Trade Secret litigation in Texas is typically brought in state district courts under the Texas Uniform Trade Secret Act. As a result, the already overloaded Texas district courts become bogged down with expedited proceedings involving trade secret matters. Trade secret litigants are then forced to navigate crowded dockets to expeditiously protect sensitive business information and intellectual property. 

What’s New: HB 40 and Trade Secrets in Business Courts

As we previously noted, on June 20, 2025, Governor Abbott signed House Bill 40 into law (effective September 1, 2025), to expand the scope of Texas Business Court jurisdiction — notably involving trade secret disputes — and to strengthen procedural clarity and venue flexibility. This law ushers in a new era for trade secret litigation in Texas. 

Trade Secrets in Texas Business Courts — Expanded Jurisdiction and Scope

• Jurisdictional thresholds lowered — The minimum amount in controversy for Business Court trade secret case eligibility is $5 million, with the ability to aggregate related claims to meet this threshold. 
• Intellectual Property and Trade Secrets — The statute explicitly adds trade secret causes of action to the list of matters Business Courts can adjudicate, alongside intellectual property, arbitration enforcement, and investment contract disputes. Notably, the Business Courts now have jurisdiction for “use” of intellectual property matters that may also have overlap in the trade secrets arena. 
• Concurrent Jurisdiction — Business Courts share jurisdiction with district courts for qualifying trade secret cases; this offers litigants an alternative venue with specialized procedures.

TUTSA Is Revised to Provide for Rapid Sealing of Trade Secret Documents

Complementing HB 40, House Bill 4081, also effective September 1, 2025, standardizes how courts treat documents containing trade secrets under Texas’s Uniform Trade Secrets Act (Chapter 134A, Civil Practice & Remedies Code). For years, trade secret litigants were bogged down in the overly technical notice requirements of the Texas statute governing sealed documents. The new law provides a streamlined procedure for sealing trade secret information. 

Sealing of Trade Secret Documents Under TUTSA Key Process Requirements

• For initiating filings containing your own trade secrets: file a notice of sealing and affidavit describing the document, with factual basis, and provide contact info, filed both in trial court and the Supreme Court of Texas, along with delivery to the court in sealed form and service on all parties. 
• For documents containing another’s trade secrets: a similar process applies, but you must notify the trade secret owner, who then has 14 days to file their own affidavit; otherwise, the document may become public.
• Universal participation: Anyone — even non-parties — may intervene to seal or unseal documents. The claimant bears the burden of proving, by a preponderance of the evidence, that the material qualifies as a trade secret. Courts retain ongoing authority over sealing and unsealing decisions. 

The Significance of Providing Trade Secret Jurisdiction to Texas Business Courts

This legislative combination — HB 40 and HB 4081 — creates a robust framework for handling sensitive business litigation in Texas and brings bet-the company litigation to experienced judges to adjudicate in a timely manner:

• Enhanced venue options for complex trade secret and broader IP disputes in a court system tailored for commercial matters.
• Structured procedural safeguards expediting the protection of trade secrets. 
• Strategic appeal for businesses: more efficient, expert adjudication without resorting to federal court or languishing in the lengthy state civil district dockets and providing a court of appeals experienced in trade secret litigation.