§ 16.010.Misappropriation of Trade Secrets

Trade secret claims get a three-year period running from when the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. That is a genuine discovery rule, written into the statute rather than left to the courts — which distinguishes it from most of this chapter.

Subsection (b) is the provision that decides cases, and it runs against plaintiffs. A misappropriation that continues over time is a single cause of action, and the clock starts without regard to whether the misappropriation was a single or a continuing act.

So a competitor who has been using your process openly for four years is protected, even though the use continues today. There is no fresh claim each day and no rolling recovery window. The only question is when a diligent plaintiff would have discovered the taking.

That rule makes early investigation valuable and delay expensive, and it is the opposite of how a continuing nuisance or trespass works elsewhere in Texas law, where each new invasion can start its own period.

The two halves pull in opposite directions, which is the point. The discovery rule is generous, because a secret taken is by definition taken quietly. The single-claim rule is strict, because a defendant should not face perpetual exposure for conduct the plaintiff knew about and tolerated.

"Should have been discovered" is where these cases are won and lost. Public use of a process, a departed employee’s new product, a competitor’s sudden capability — each is an argument that a diligent plaintiff would have known, and each is assessed against what the plaintiff could reasonably have been expected to notice.

The section governs the limitations period only. What a trade secret is, and what counts as misappropriation, are answered by the Texas Uniform Trade Secrets Act in the Civil Practice and Remedies Code’s Chapter 134A.