Topic
Trade Secrets and AI Work
How AI use can weaken, create or move trade secrets, and who owns what an AI tool helps produce.
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Short Answer
Texas trade secret protection requires information with value from secrecy and reasonable measures to preserve that secrecy. Uploading confidential information to a chatbot can undermine those measures when the provider’s rights, access or retention conflict with the owner’s controls. The result depends on the information and the terms; an upload is not an automatic legal conclusion. Prompt libraries and system prompts can qualify for protection when they meet the same statutory tests. Identify the claimed secret narrowly. In DeWolff, Boberg & Associates v. Pethick, the Fifth Circuit rejected a Dallas-headquartered management consulting firm's broad database claim because it neither distinguished public from non-public information nor identified the claimed secret with specificity, and because there was no evidence the former employee used or disclosed the information. The case did not involve AI. Comet Technologies USA v. XP Power, a Ninth Circuit Defend Trade Secrets Act (DTSA) decision, assigns the plaintiff the burden of proving that information was not readily ascertainable through proper means. It did not decide whether AI made any information ascertainable. AI reconstruction is a factual question requiring evidence of the inputs, lawful access, output and effort. Employee departures add account, assistant and prompt-library transfers to familiar download risks. Copyright and inventorship depend on different rules. The short ownership Guide links to Texas IP Law for those subjects; this hub focuses on secrecy and AI workflows.
Key Authorities
Guides
Employee Use of AI and Confidential Information
Which AI tools employees may use, what they may put into them, and why the answer affects trade secret protection.
AI and Trade Secret Protection
How AI changes the two elements that decide whether information is a trade secret: secrecy measures and ascertainability.
Prompts and System Prompts as Trade Secrets
When prompt libraries, system prompts and AI workflows can be protected, and what defeats protection.
Departing Employees, New Hires, and AI
AI tools give information new ways to leave with an employee and new ways to arrive with one.
Ownership of AI-Assisted Work
Who owns what an AI tool helps produce depends on human contribution and contract terms.
AI Patents and Trade Secrets in Texas
Who can be an inventor when AI did part of the inventing, and how feeding prompts into a public AI tool can cost a Texas company its trade secrets.
Insights
Comet v. XP Power and the Burden on Ascertainability
Under the federal trade secret statute, the plaintiff must prove its information was not readily ascertainable. A jury instruction that said otherwise cost the plaintiff its verdict.
xAI v. OpenAI and Coordinated Departures
The June 15, 2026 dismissal required allegations connecting the hiring company to the asserted trade-secret misconduct.