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Austin’s Torchy’s Tacos Sues Competitor Over Alleged Theft of Trade Secrets

Torchy’s Tacos, an Austin-based chain of 20 restaurants, has filed a lawsuit against Houston-based Texas Taco Co. claiming that the smaller chain stole its recipes and duplicated its menu items.

Torchy’s, with restaurants in Austin, Houston and Dallas-Ft. Worth, claims that Texas Taco, a chain of three stores, used Torchy’s “Taco Bible” to create a nearly identical menu. According to the complaint, a former employee of Torchy’s stole the book of detailed recipes. The cook now allegedly works at Texas Taco, where some items with identical descriptions have appeared on the menu.

The plaintiff claims that its recipes constitute trade secrets because they detail start-to-finish processes describing the order in which ingredients are cooked and how they are combined.

According to the lawsuit, a Torchy’s manager viewed security footage that showed an employee hiding the Taco Bible under his shirt and exiting the restaurant. The manager called the employee and demanded he return the book, which he did approximately six hours later. He was then fired.

Two months later, Torchy’s claims that a manager visited Texas Taco Co. and found the ex-employee working there and nearly identical items on the menu.

According to a local news report, some of the descriptions on the menus of the two restaurants are duplicated verbatim.

Torchy’s claims that the ex-employee provided Texas Taco with trade secrets in violation of a nondisclosure agreement he signed.

J.P. Morgan Accused of Double-Leasing Oil Land

J.P. Morgan has been sued over the alleged double-leasing of oil property in south Texas. The lawsuit was filed by Orca Assets G.P. LLC in U.S. District Court in Dallas, alleging negligent misrepresentation and fraud. Orca, a small, Houston-based energy company, is suing the country’s largest bank by assets, claiming that J.P. Morgan leased property that had already been leased to another entity.

Orca claims that it agreed to pay $3.2 million for the lease to over 900 acres. J.P. Morgan represented the seller, the Red Crest Trust, and also served as trustee and administrator of the trust. Orca is claiming lost profits of up to $400 million.

J.P. Morgan filed a motion for summary judgment, in which it acknowledged that it had leased the property both to Orca and to another entity within a time period of five months. However, the bank claimed that Orca failed in its responsibility to thoroughly vet the title to the property. According to J.P. Morgan, if Orca had attempted to verify the validity of the title and the ability of the land to be leased, it would have discovered the prior lease.

J.P. Morgan also said that Orca’s damages claims were inflated. The bank said that the company’s claims were based on “pie-in-the-sky assumptions” and that Orca’s ability as an oil operator was unproven.

The case, unusual because of the size of the damages claim and the fact that J.P. Morgan admitted its error, is expected to go to trial in December.

Lawsuit by Austin’s Torchy’s Tacos Accuses Competitor of Theft of Trade Secrets

A taco restaurant based in Austin, Texas has filed a lawsuit against a competing restaurant in Houston alleging theft of trade secrets. Torchy’s Tacos, with 20 outlets in Austin, Houston and the Dallas-Ft. Worth area, claims that three-store, Houston-based Texas Taco Co. stole its recipes and duplicated menu items.

The lawsuit, filed in Harris County, claims that a former Torchy’s employee stole the company’s “Taco Bible,” which contains detailed recipes. The grill cook now works for Texas Taco, where the menu items are allegedly duplicated. The lawsuit seeks unspecified damages and an injunction requiring Texas Taco to stop using confidential information gained from Torchy’s.

Although a taco recipe may seem like something that is generally known, and therefore not capable of being a trade secret, Torchy’s says that its Taco Bible and “Build Book” are different because they contain detailed start-to-finish processes of the way that food ingredients are combined, the order in which they are cooked and the manner in which they are assembled.

The lawsuit claims that Torchy’s Chef Michael Rypka — who started the company in Austin in 2006 with a motor scooter and food trailer — personally developed or approved all the menu items and “food concepts and food designs” served at the restaurants.

The lawsuit claims that a security camera at Torchy’s captured a then-employee putting a copy of the Taco Bible under his shirt and then exiting the restaurant. According to the lawsuit, a manager saw the security video and demanded that the employee return the book, which he did approximately six hours later. The employee was then fired.

The complaint alleges that approximately two months after the incident, Torchy’s discovered that the new Texas Taco restaurant in Baytown, approximately 30 miles outside Houston, had a similar menu. A Torchy’s manager visited the restaurant and claims he found the ex-employee working there and nearly-identical items on the menu.

According to a local news report, the descriptions of some items on Texas Taco’s menu are a word-for-word match to Torchy’s menu items, with only the name of the item changed. A taco that Texas Taco named the “William Travis” has the same 27-word description as the item that Torchy’s calls the “Republican.” The same is allegedly true for other items, including quirks such as the use of all-capitalized letters for some ingredients.

The lawsuit alleges that the ex-employee gave trade secrets to Texas Taco in violation of a nondisclosure agreement that he signed with Torchy’s.

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