Affirming a district court’s grant of summary judgment, the United States Court of Appeals for the Fifth Circuit held that Texas’s two-year statute of limitations barred the plaintiffs’ trade secret misappropriation claim. General Universal Sys. Inc. v. HAL Inc., 500 F.3d 444 (5th Cir., 2007) (Garza, J.).
In 1979, plaintiff General Universal Systems, Inc. (GUS) developed a software program called CHAMPION PACKER for co-plaintiff Jose Lopez. Later, Lopez created a derivative program called LOPEZ COBOL. LOPEZ COBOL was based on CHAMPION PACKER, but written in a different computer language. Lopez began selling and leasing the derivative program to clients through his own company. One of those clients was Superior Packing, Inc., a company owned by defendant Herrin. In 1992, defendants Herrin and Parkin and plaintiff Lopez formed a company named HAL Inc. (HAL) and agreed to develop and market a new software program to succeed LOPEZ COBOL. The new program was to be based in large part on LOPEZ COBOL. Herrin, Parkin and Lopez began working on the new program—called MEPAW—in the summer of 1992. Beginning in December of 1992, Lopez spent seven months in a Mexican prison. In a letter dated March 22, 1993, Herrin notified Lopez that he and Parkin agreed to oust Lopez from their agreement because Lopez’s incarceration prevented him from fulfilling his duties. Through HAL, Herrin and Parkin continued the development of MEPAW until approximately August 1993, when they began marketing MEPAW to potential clients.
