## Facts

- Thomas Barton Schalk and Robert Gary Leonard worked in speech research at Texas Instruments (TI) and later joined a competing firm, Voice Control Systems (VCS).
- Both signed employment and confidentiality agreements requiring protection of TI proprietary information and trade secrets.
- TI used multiple safeguards for proprietary software and data, including security personnel, controlled facility access, monitoring, and internal restrictions limiting access to employees with a need to know.
- Before leaving TI, Schalk and Leonard downloaded the entire contents of their assigned TI computer directories, which included speech-related programs and data.
- A former TI employee at VCS later saw information on a VCS computer that appeared proprietary to TI, prompting an investigation.
- The State charged Schalk and Leonard with theft of trade secrets under Tex. Penal Code § 31.05 based on taking and possessing TI’s confidential programs and related materials.
- A jury convicted both defendants and assessed two years’ confinement and a $5,000 fine each; the intermediate appellate court affirmed.

## Issues

1. Whether the evidence was sufficient to prove the programs and related data were “trade secrets” under Tex. Penal Code § 31.05, including whether TI took required measures to prevent availability to unauthorized persons.
2. Whether the search warrant for magnetic tapes and related computer media was sufficiently particular, or instead authorized an unconstitutional general exploratory search.

## Decision

- The court affirmed the convictions.
- The evidence permitted a rational jury to find beyond a reasonable doubt that TI’s programs and related materials were trade secrets under § 31.05.
- TI’s combination of confidentiality agreements and physical/electronic access controls constituted sufficient measures to maintain secrecy; absolute secrecy was not required.
- The warrant describing the computer-related media to be seized was adequately particular given the nature of the evidence sought.
- The warrant’s execution did not exceed its scope and did not amount to a general exploratory search; the suppression motion was properly denied.

## Legal Principles

- For criminal theft of trade secrets under Tex. Penal Code § 31.05, the State may prove “trade secret” status by showing the owner used reasonable measures under the circumstances to maintain secrecy; perfect secrecy is not required.
- Reasonable measures can include contractual restrictions (confidentiality agreements), physical security (controlled access, guards), and internal controls limiting access to those selected by the owner.
- Limited or controlled disclosure consistent with business operations does not automatically negate trade-secret protection when secrecy measures remain in place.
- In searches for electronic storage media, a warrant may describe items in functional or categorical terms when a more precise description is impracticable, so long as it provides meaningful limits and is executed within its scope.
- A search is not a forbidden general exploratory search where officers have sufficient guidance from the warrant and confine seizures to items described.

## Conclusion

The court sustained theft-of-trade-secrets convictions by holding that TI’s contractual and security practices were adequate to show reasonable secrecy measures under § 31.05, and it upheld the seizure of computer tapes because the warrant was sufficiently particular and was not executed as an indiscriminate search.


Schalk v. State, 823 S.W.2d 633 (Tex. Crim. App. 1991) (en banc)