Protecting Intellectual Property in Your Texas Business

A Texas business protects its intellectual property through four main tools: trademark and service mark rights, trade secret law, copyright, and written IP-assignment agreements with employees and contractors. Used together, they cover your brand, your confidential know-how, and the work your team creates. This guide explains how each one works under current Texas and federal law and where the common gaps are.

Intellectual property is often the most valuable thing a young company owns. For startups, franchisors, importers, and exporters operating under Texas law, the brand name, the customer list, the secret process, and the software are frequently worth more than any physical asset. The law treats each of these differently, so protecting them well means matching the right legal tool to the right asset.

Trademarks and Service Marks: Protecting Your Brand

A trademark identifies the source of goods; a service mark identifies the source of services. Both protect the name, logo, or slogan customers use to recognize you. You get common-law rights simply by using a distinctive mark in commerce — you do not have to register to own a mark. Registration, however, gives you real advantages.

You can register a mark at two levels, and they are not mutually exclusive:

A Texas certificate of registration is prima facie (rebuttable) proof of the validity of the registration, your ownership of the mark, and your exclusive right to use it in Texas for the relevant goods or services. Texas registrations expire after five years unless you file a renewal during the last six months of the term, and the mark must still be in use at renewal. Under current Secretary of State practice, trademark applications are accepted only through the online portal — paper filings are no longer accepted.

One common misconception is worth flagging: forming an LLC or corporation, or filing an assumed name (DBA), does not give you trademark rights. An entity filing only stops the state from registering a confusingly similar legal name; it does not stop a competitor from using your brand in the marketplace. If your brand matters, register the mark, not just the entity.

Passing Off and Unfair Competition

Texas also recognizes “passing off,” a form of unfair competition that occurs when a producer misrepresents its goods or services as someone else’s. The mirror image, “reverse passing off,” happens when someone misrepresents your goods or services as their own. Paired with trademark infringement, these claims let a business protect both the mark and the underlying goodwill and presentation of its product. It is also a crime under the Texas Penal Code to counterfeit a registered mark.

Trade Secrets: Protecting Confidential Know-How

A trade secret is confidential business or technical information — a formula, process, method, customer list, or design — that has value because it is not generally known and that the owner takes reasonable measures to keep secret. Unlike a trademark or patent, a trade secret is never registered; protection lasts only as long as the secret stays secret.

Texas trade secrets are governed by the Texas Uniform Trade Secrets Act (TUTSA), codified in the Civil Practice and Remedies Code and effective for claims arising on or after September 1, 2013. TUTSA gives owners civil remedies for misappropriation, including injunctions and damages, and in appropriate cases attorney’s fees. Separately, the Texas Penal Code makes theft of a trade secret — knowingly stealing it, copying it, or communicating it without the owner’s consent — a third-degree felony.

The legal protection is only as strong as the precautions behind it. To keep information protected as a trade secret, a business should:

• Limit access to people who genuinely need it.
• Use written non-disclosure agreements with employees, contractors, and vendors.
• Mark confidential materials and store them securely, physically and digitally.
• Have departing employees acknowledge their continuing confidentiality obligations.

If you never take reasonable steps to guard the information, a court may find it was not a protectable trade secret at all.

Who Owns Employee-Created IP?

Ownership of inventions and creative work made by employees is a frequent source of disputes, and the default rules are easy to get wrong. In general, work an employee is hired and paid to create belongs to the employer, and a “work made for hire” under copyright law vests in the employer automatically. But the defaults are narrower than most owners assume — an invention developed outside the scope of employment, on the employee’s own time and equipment, can belong to the employee, with the employer sometimes retaining only a limited “shop right” to use it.

The reliable fix is contractual, not statutory. Use a written agreement, signed at hire, in which the employee or contractor assigns to the company all IP created within the scope of the relationship and confirms their confidentiality obligations. This is especially important for contractors: absent a written assignment, an independent contractor often owns the copyright in what they create for you, even though you paid for it. For founders contributing their own pre-existing IP to a new company, the assignment should be explicit and documented — a point we cover in our guide on whether founders should pay for stock in cash or contribute intellectual property.

Putting an IP Plan Together

A practical Texas IP plan usually combines several of these tools. A typical small business or franchisor registers its core brand as a trademark (state, federal, or both), protects its methods and customer data as trade secrets backed by NDAs, and locks down ownership of everything its team creates through assignment agreements. As you grow and license your brand — for example, when forming a corporation in Texas or moving into franchising — getting these protections in place early is far cheaper than untangling a dispute later.

Frequently Asked Questions

Do I have to register my trademark to have any rights? No. You acquire common-law rights by using a distinctive mark in Texas commerce. Registration adds legal presumptions, public notice, and access to statutory remedies, which make rights much easier to enforce.

How long does a Texas trademark registration last? Five years. You can renew it for additional five-year periods by filing during the last six months of the term, and the mark must still be in use at renewal.

Does forming my LLC protect my business name as a trademark? No. An entity or assumed-name filing only addresses your legal name in state records. It does not give you trademark rights or stop competitors from using a similar brand in the market.

Who owns software or designs a contractor builds for me? Often the contractor, unless you have a written agreement assigning the IP to your company. Always use a signed IP-assignment and confidentiality agreement before work begins.

Building or protecting a Texas business? Reidel Law Firm helps Texas owners register trademarks, lock down trade secrets, and put the right IP-assignment agreements in place — with flat-fee work where we can and direct attorney access throughout. Talk to a Texas business attorney →