Relating to the sealing of certain documents alleged to contain trade secrets.
CriticalImmediate action required
Low Cost
Effective:2025-06-20
Enforcing Agencies
Texas Civil Trial Courts
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date:June 20, 2025 (Projected immediate effect due to supermajority vote).
Compliance Deadline:June 20, 2025. Any document filed in a Chapter 134A action on or after this date triggers the new requirements. There is no grace period.
Agency Rulemaking:None. The statute explicitly prohibits the Supreme Court of Texas from adopting rules that conflict with this section. You must rely on the statutory text immediately; do not wait for judicial clarification.
Immediate Action Plan
Distribute Memo to Outside Counsel: Instruct all litigation counsel to implement a "HB4081 Compliance Checklist" for active and future cases immediately.
Draft the Affidavit: Prepare the "Factual Basis" affidavit template for your core IP assets (source code, customer lists, formulas) this week.
Audit Active Litigation: Review all pending cases. While the law applies to *new* filings, ensure no upcoming filings rely on outdated protective order procedures.
Update Vendor Contracts: Issue an addendum to critical vendors regarding the 24-hour notification requirement.
24-Hour Notice Clause: Insert a clause requiring vendors holding your data to notify you within 24 hours if they are sued and your data is implicated. The statutory window for you to act is 14 days; standard "reasonable notice" clauses are now insufficient and dangerous.
Cooperation Mandate: Contractually obligate vendors to cooperate with your counsel to facilitate the filing of sealing affidavits.
Hiring/Training
Litigation Triage Protocol: Train legal support staff and intake officers to flag any "Notice of Sealing" as Critical/Urgent. These cannot sit in a queue; the 14-day countdown begins upon receipt.
Affiant Designation: Designate a corporate officer responsible for signing trade secret affidavits. This individual must be knowledgeable about the company's security measures and the economic value of the secret.
Reporting & Record-Keeping
"Factual Basis" Affidavit Template: Create a "break glass" affidavit template now. It must be ready to file immediately and must detail:
1. Specific security measures (physical and digital).
2. Economic value derived from secrecy.
3. Effort/cost expended to develop the information.
Dedicated Compliance Inbox: Establish a permanent legal compliance email address to list in court filings. Do not use an individual employee's email address for the statutory contact requirement.
Fees & Costs
Legal Spend Reallocation: Expect front-loaded legal costs in litigation. Counsel must now draft substantive evidentiary affidavits at the *filing* stage, rather than deferring these costs to discovery disputes.
No New State Fees: There are no new filing fees payable to the state, but the cost of non-compliance is the total loss of asset value.
Strategic Ambiguities & Considerations
"Factual Basis" Threshold: The statute requires an affidavit establishing a "factual basis" for the trade secret but does not define the evidentiary standard.
*Risk:* A vague affidavit may survive filing but fail a motion to unseal. A too-detailed affidavit risks revealing the secret itself.
*Guidance:* Err on the side of detailed descriptions of *security protocols* and *economic impact*, rather than describing the technical specifics of the secret itself.
Intervention Timing: The law allows third parties (competitors, media) to intervene "at any time" to unseal documents. A judgment does not guarantee permanent secrecy; your affidavit must be robust enough to withstand scrutiny years later.
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The bill author has informed the committee that trade secret lawsuits often require businesses to present confidential information in court and, if not properly protected, this information could be exposed and harm businesses. The bill author has additionally informed the committee that, while current statute offers some protection, clearer procedures could be useful in ensuring that trade secrets remain confidential throughout the process of a lawsuit. H.B. 4081 seeks to address this issue by establishing such a procedure for sealing court documents that contain trade secrets.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 4081 amends the Civil Practice and Remedies Code to require a party to an action under the Texas Uniform Trade Secrets Act seeking to seal a document containing the party's own alleged trade secret to do the following:
·file with the trial court and the supreme court a notice of sealing, and an affidavit that does the following:
ogenerally describes the type of information contained in the document;
oprovides contact information for subsequent notice of any motion to unseal the document; and
osets forth the factual basis for the party's allegation that the information constitutes a trade secret;
·deliver a copy of the document to be sealed to the trial court in a sealed envelope labeled to identify the notice of sealing to which the document corresponds; and
·serve a copy of the notice, affidavit, and document on each other party to the action.
H.B. 4081 requires a party to an action under the act filing a document the party knows another person alleges to contain the person's trade secret to do the following:
·file with the trial court and the supreme court a notice of sealing, and a statement that generally describes the type of information contained in the document and identifies the person who alleges the document contains the person's trade secret;
·deliver a copy of the document to be sealed to the trial court in a sealed envelope labeled to identify the notice of sealing to which the document corresponds; and
·serve a copy of the notice, affidavit, and document on each other party to the action and any person who alleges the document contains the person's trade secret who is not a party to the action.
H.B. 4081 requires a person who alleges a document contains the person's trade secret, not later than the 14th day after the date the person receives a notice of sealing of the document, to file with the trial court and supreme court in the same numbered cause an affidavit that does the following:
·generally describes the type of information contained in the document;
·provides contact information for subsequent notice of any motion to unseal the document; and
·sets forth the factual basis for the person's allegation that the information in the document constitutes a trade secret.
H.B. 4081 requires the following if the trial court receives a notice, statement, and sealed document from the party filing a document the party knows another person alleges to contain the person's trade secret:
·for the document to be treated as filed under seal until the expiration of the time granted by the bill for the person who alleges the document contains the person's trade secret to file an affidavit; and
·if no affidavit is timely filed, for the document to be treated as publicly filed until an applicable affidavit is filed.
The bill requires the document to be treated as permanently filed under seal once the trial court receives a notice, affidavit, and sealed document from a party or person under the bill's provisions.
H.B. 4081 authorizes any person to intervene as a matter of right at any time before or after judgment in an action under the Texas Uniform Trade Secrets Act to seal or unseal a document. The bill authorizes a person, if the person alleges the person's trade secret was filed of public record, to seal the document containing the alleged trade secret by taking the same actions with respect to the document that a party to an applicable action is authorized to take with respect to the party's alleged trade secret under the bill. The bill establishes that the trial court retains continuing jurisdiction to seal or unseal a document filed in an action under the act.
H.B. 4081 authorizes any person to move to unseal any document filed under seal under the bill's provisions and requires the motion, and notice of hearing, to be served on the parties to the action in which the document was filed, and the person who submitted an affidavit alleging a document contains the person's trade secret or that the person's trade secret was filed of public record, by certified mail, return receipt requested, not later than the 14th day before any hearing on the motion in the trial court. The bill requires the trial court to grant the motion and unseal all or part of the document if the person who alleges that the document contains the person's trade secrets fails to demonstrate by a preponderance of the evidence that the document, or a part of the document, contains a trade secret. If the trial court determines that only a part of the document should be unsealed, the trial court is required to redact all information that contains a trade secret before providing the document to the movant. An order granting or denying a motion to unseal a document under the bill's provisions is considered to be severed from the action and is a final judgment that may be appealed by any party or intervenor who participated in the hearing preceding the issuance of the order. The bill prohibits the supreme court from adopting rules in conflict with the bill's provisions, notwithstanding Government Code provisions regarding rules of civil procedure.
H.B. 4081 applies only to a document filed in an action on or after the bill's effective date. A document filed before that date is governed by the law applicable to the document immediately before the bill's effective date, and that law is continued in effect for that purpose.
HB4081 fundamentally alters Texas trade secret litigation by imposing a strict "ticking clock" on confidentiality: failure to file a specific affidavit within 14 days of notice results in the automatic public unsealing of your proprietary information. This legislation shifts the burden of proof immediately to the trade secret owner—whether a party to the lawsuit or a third party—requiring proactive substantiation of secrecy claims to prevent forfeiture of Intellectual Property (IP) rights. Implementation Timeline Effective Date: June 20, 2025 (Projected immediate effect due to supermajority vote).
Q
Who authored HB4081?
HB4081 was authored by Texas Representative Cody Vasut during the Regular Session.
Q
When was HB4081 signed into law?
HB4081 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB4081?
HB4081 is enforced by Texas Civil Trial Courts.
Q
How urgent is compliance with HB4081?
The compliance urgency for HB4081 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB4081?
The cost impact of HB4081 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB4081 address?
HB4081 addresses topics including business & commerce, business & commerce--trade practices, civil remedies & liabilities, courts and courts--general.
Legislative data provided by LegiScanLast updated: November 25, 2025
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