Texas Business Court Signals Broad IP Jurisdiction, Opening Door to Patent‑Adjacent Disputes

By Editorial Team

The Texas Business Court is emerging as a key venue for trade secrets disputes in the state, with a recent decision shedding light on its expansive approach to considering trade secrets claims, potentially extending to patent-adjacent litigation.

In a ruling in February, Business Court Judge Stacy Rogers Sharp permitted the transfer of a trade secret-related case between Alamo Title Co. and WFG National Title Co. from state district court to the business court, indicating a broad interpretation of the court's intellectual property (IP) jurisdiction.

Judge Sharp emphasized that jurisdiction is not limited to narrowly pleaded standalone trade secret misappropriation claims. Instead, the court will examine the substance of the allegations. Even without an explicit trade secret count, claims involving misuse of confidential information, customer lists, or employee data may fall under the business court's authority. The ruling stressed that cases "relating to" intellectual property qualify, even if the IP issues are tangential to other claims.

While the business court has focused on the Texas Uniform Trade Secrets Act so far, similar legal principles may apply to certain types of patent-related disputes. Although the court cannot hear patent infringement or invalidity claims, this recent ruling suggests receptiveness to patent-related disputes rooted in contracts and ownership. Potential cases include disputes over patent assignments during corporate transactions, inventor-employer ownership conflicts, and breaches of patent or other IP licensing agreements involving royalties or scope of use.

Established by the Texas Legislature in 2023 and expanded in 2025 to include IP disputes and a lowered $5 million damages threshold, the business court draws inspiration from Delaware's Chancery Court. Lawyers favor this venue due to appointed judges, the requirement for written opinions, and expedited case processing, with trial dates often set within six to eight months. Previously, such cases were heard in Texas state district court, competing for docket space with non-business matters like child custody disputes, foreclosures, and personal injury claims.

While the decision is not binding, it suggests that the Texas Business Court could become a significant forum for complex, business-focused IP and patent-adjacent disputes. Businesses seeking to use this court for IP-related and other business disputes can adjust venue clauses in agreements to designate the Texas Business Court in cities like Houston, Dallas, or Austin. By consenting to this forum for disputes exceeding the $5 million damages threshold before a conflict arises, parties can save time, costs, and benefit from experienced business litigation judges. In cases where venue for the Texas Business Court is not specified and potential damages meet the minimum threshold, parties should consider this court for resolution to leverage potential efficiencies.