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7 Year Trade Secrets Theft Conviction Reversed by Texas Court of Appeals

The Texas Court of Appeals in the sixth district handed down the opinion Oct. 17, acquitting Frank McClain Jr. of stealing trade secrets from his former Lufkin employer, Didrikson and Associates, and throwing out his seven-year prison sentence. Interestingly, they not only reversed the conviction but have ordered an entry of acquittal in the matter - such that McClain cannot be retried in the matter.

Didrikson and Associates is a company that services the petrochemical and pipeline industries.
The opinion stated materials, known as backsheets, that McClain took from his employer to open a competing company are not trade secret, which was the basis of the evidence used to convict McClain in 2006. An Angelina County state district judge later sentenced him to seven years in prison.

McClain's appeal attorney Al Charanza, Jr. said he presented the case the first week of September. Although he was not surprised by the court's decision, he said he was impressed how quickly the opinion was issued.

"The court found what I have been saying all along ? McClain is not guilty of stealing trade secrets," he said. "There was insufficient evidence."

In an opinion issued, the appellate court stated the trial record established the backsheets were public knowledge, and could not be considered trade secrets by legal definition.

"Didrikson admitted the backsheets had been placed in the public domain by GE, the original publisher," the opinion stated.

The opinion further stated any improvements or notes on the backsheets do not fall under trade secrets either.

"The only improvements identified as being stolen by McClain are the set-up sheets. Didrikson testified that the set-up sheets were McClain's idea and that McClain was the only person who created the set-up sheets," the appellate court stated.

The court concluded that although McClain may have obtained the backsheet information wrongfully, he is not guilty of theft of trade secrets.

"The evidence is legally insufficient. Because the evidence is legally insufficient, it is unnecessary to decide McClain's fourth point regarding error in the jury charge," the court stated. "We reverse the judgment of the trial court and render a judgment of acquittal."

Full post as published by Womble Trade Secrets Blog on October 23, 2008 (boomark / email).