Business is booming in the oil fields, along with oil and gas litigation. Since Texas passed the Texas Uniform Trade Secrets Act (TUTSA), there have been many cases concerning trade secrets in the gas and oil industry. Technological advances such as hydraulic fracturing and horizontal drilling have opened up further areas of disagreement. Oil and gas law experts in Texas report that cases involving mineral interests and surface trespass are not uncommon; underpayment of royalties is frequently alleged.
Trade Secrets
TUTSA became effective on September 1, 2013 and governs misappropriation of trade secrets. There are several general prerequisites in order to get protection under this law. The energy sector is extremely competitive, leading to multiple cases concerning claims of misappropriated trade secrets.
* The person seeking protection must own the secret
* The secret must have either real or potential value
* The secret must not be either generally known or easy to ascertain
* Reasonable steps must be taken to protect the secret
“Misappropriation” can be defined as stealing the secret or using it without consent. However, if someone is able to reverse engineer the “secret,” and has not signed a Nondisclosure or other form prohibiting reverse engineering, then they will be considered to have properly gained the “secret.”
Anyone in the industry needs to do all possible to protect their proprietary information. Such measures would include “cease and desist” letters as a formal notification of an infringement and trade secret protection clauses included in all deal documents.
Mineral Interests and Royalties
This area is always a hotbed of disputes. Horizontal drilling can be difficult to reconcile with the traditional doctrines regarding surface trespass and mineral rights. This also brings forth claims of underpaid royalties and post-production costs, according to oil and gas law experts in Texas.
One interesting case involved two mineral leases that had been pooled, but only one lease was producing. The case revolved around whether or not the owner of the producing lease had the right to cross the land of the owner of the non-producing lease to reach his well (he did.)
The law firm of Kebodeaux, Hargroder & Alexander, L.L.P offers a wide range of legal services, including oil and gas litigation. They focus on obtaining the best results possible for each client. Click here to visit their website and schedule a consultation to discuss your legal options.
