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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB4081

Regular Session

Relating to the sealing of certain documents alleged to contain trade secrets.

Government Affairs & Regulatory Compliance Analysis

HB4081: Government Affairs Overview

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鈥攚hether a party to the lawsuit or a third party鈥攔equiring proactive substantiation of secrecy claims to prevent forfeiture of Intellectual Property (IP) rights.

Rep. Cody Vasut路House Bill路Regular Session

Critical
Low Cost
Effective:2025-06-20
Enforcing Agencies

Texas Civil Trial Courts

Business Impact

Who HB4081 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-06-20). Review with your legal and compliance teams to understand implications.

馃彮

Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation

Key Operational Considerations

  • 1Vendor Notification Amendments: Update Master Services Agreements (MSAs) and Non-Disclosure Agreements (NDAs) immediately.
  • 2Cooperation Mandate: Contractually obligate vendors to cooperate with your counsel to facilitate the filing of sealing affidavits.
  • 3Litigation 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.

Estimated Cost Impact

lowMinimal cost impact anticipated.

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HB4081
Relating to the sealing of certain documents alleged to contain trade secrets.
Critical Urgency
Passed with Opposition
House Vote140 - 5
YEA
97% in favor145 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
5
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Texas Civil Trial Courts
Primary Author: Rep. Cody Vasut
89th Texas Legislature
jdkey.com
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.

Operational Changes Required

Contracts

  • Vendor Notification Amendments: Update Master Services Agreements (MSAs) and Non-Disclosure Agreements (NDAs) immediately.
  • 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.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey鈥攆ormer Chairman of the Republican Party of Texas鈥攖o understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 7, 2025
Passed House
May 6, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsBusiness & CommerceBusiness & Commerce--trade PracticesCivil Remedies & LiabilitiesCourtsCourts--general
03

House Authors

Rep. Cody VasutRepublican 路 Primary Author
Joint Authors

Senate Sponsor

Sen. Bryan HughesRepublican 路 Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Cody Vasut

View all bills by Rep. Cody Vasut

Related by Topic

View more Business & Commerce legislation
Quick Reference

Frequently Asked Questions

Common questions about HB4081

Q

What does Texas HB4081 do?

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鈥攚hether a party to the lawsuit or a third party鈥攔equiring proactive substantiation of secrecy claims to prevent forfeiture of Intellectual Property (IP) rights.

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 significant are the changes in HB4081?

The regulatory priority for HB4081 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

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.

Q

What are the key dates for HB4081?

Key dates for HB4081: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB4081?

HB4081 primarily affects Texas businesses and commercial enterprises. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026