## Facts

- Thomas Barton Schalk worked as a researcher on his employer’s confidential project to develop new speech-recognition software and related computer materials.
- The employer treated the project materials as secret and used multiple protections, including nondisclosure agreements, password-protected file access, identity badges, security guards, secured work areas, video monitoring, and frequent meetings stressing security.
- Before leaving to work for a rival firm in the same field, Schalk copied project-related computer files from his own directories.
- Schalk also copied materials from a shared “speech-utility directory” used by the project team.
- After changing jobs, Schalk shared the copied files with his new employer and, at times, referred to the files in a way that suggested he knew they were taken without authorization (including describing them as stolen).
- The conduct was discovered after concern arose that proprietary materials from Schalk’s former employer were present at the rival company, leading to law-enforcement involvement.
- The State prosecuted Schalk for theft of trade secrets under Texas Penal Code § 31.05; a jury convicted him and assessed punishment including confinement and a fine.
- Schalk appealed, arguing in part that he believed he was allowed to copy his files and did not know his former employer treated the materials as trade secrets, and also challenging the search warrant used to seize computer storage media.

## Issues

1. Was the evidence sufficient to prove the copied software materials and directories qualified as “trade secrets” under Texas Penal Code § 31.05?
2. Was the evidence sufficient to show Schalk knowingly appropriated trade secrets (including knowledge that the materials were protected and taken without effective consent)?
3. Did the search warrant describing magnetic tapes and related computer media satisfy constitutional and statutory particularity requirements, or did it authorize an impermissible general exploratory search?
4. Did any additional claimed trial errors (including alleged jury misconduct) require reversal?

## Decision

- The Texas Court of Appeals affirmed Schalk’s conviction.
- The court held the evidence was sufficient for the jury to find that the software materials and related directories were trade secrets because the owner took concrete steps to restrict access and maintain secrecy.
- The court held the evidence was sufficient to support the jury’s finding that Schalk acted with the required mental state, given the confidentiality measures, the timing and scope of copying, his transfer of files to a competitor, and his statements suggesting awareness the files were unauthorized.
- The court rejected the Fourth Amendment and Texas-law challenges to the warrant, concluding the description of the magnetic tapes and related media was sufficiently specific and the seizure was not a general rummaging for evidence.
- The court overruled Schalk’s remaining complaints and left the judgment intact.

## Legal Principles

- Under Texas Penal Code § 31.05 (as applied here), information may be treated as a trade secret when the owner takes measures to prevent it from becoming available to persons other than those the owner selects for limited purposes.
- Evidence of secrecy measures—such as nondisclosure agreements, password controls, restricted facilities, surveillance, and repeated security reminders—supports a finding that technical information is protected as a trade secret in a criminal prosecution.
- A defendant’s knowledge and intent in trade-secret theft may be proven through circumstantial evidence, including what the defendant was told about confidentiality, what the defendant copied, when the copying occurred, how the materials were used or shared, and statements indicating awareness of wrongdoing.
- A warrant for computer storage media must describe the items to be seized with enough specificity to limit officer discretion; it is not invalid merely because the items are technical, so long as it is directed at particular media and data connected to the suspected offense and executed within those limits.
- On appellate review of evidentiary sufficiency, the question is whether a rational jury could have found each required element beyond a reasonable doubt based on the record.

## Conclusion

The court affirmed Schalk’s trade-secret theft conviction because the employer’s layered confidentiality and access controls supported trade-secret status, the circumstances and Schalk’s own conduct supported a finding that he knowingly took and shared protected files without consent, and the search warrant for the magnetic tapes and related media was described and executed with adequate limits rather than as a general exploratory search.


Schalk v. State, 767 S.W.2d 441 (1988)