By Arthur Gollwitzer

The 2025 biennial session of the Texas Legislature brought changes to the Texas Business Court that was created in 2023. With the passage of House Bill 40 (HB 40), the legislature expanded the Business Court’s jurisdiction to include a range of intellectual property matters. This legislative change offers a new option for litigating certain IP disputes in Texas.

Background: The Texas Business Court

Established in 2023, the Texas Business Court provides a specialized forum for complex business disputes, aiming to deliver more efficient and expert decisions in such cases. Prior to HB 40, the court’s jurisdiction was primarily focused on high-value business and commercial litigation. Now, however, lawmakers have broadened the court’s authority, including certain IP matters. (See: Texas Business Courts Poised for Growth: New Texas Legislation Means More Corporate Cases Will Be Resolved in Specialized Texas Business Courts)

Key Provisions of HB 40

HB 40, specifically Section 45, amends the Texas Government Code by adding Section 25A.004(d)(4). This new provision grants the Business Court concurrent jurisdiction over actions “arising out of or relating to the ownership, use, licensing, lease, installation, or in performance of intellectual property.” The statute explicitly includes:

• computer software, software applications, information technology, and systems;
• data and data security;
• pharmaceuticals, biotechnology products, and bioscience technologies; and
• trade secrets, as defined in Section 134A.002 of the Civil Practice and Remedies Code.

This expansion means that the Business Court now can hear cases involving disputes over the ownership and licensing of intellectual property, as well as cases alleging trade secret misappropriation. The court’s jurisdiction is concurrent, meaning that parties still may have the option to file such cases in other courts, but the Business Court is now a viable and potentially attractive venue for these matters.

Limitations: Patent Infringement Remains Federal

It is important to note that, despite this expansion, patent infringement lawsuits remain almost exclusively within the jurisdiction of the federal courts. The federal system retains primary authority over patent validity and infringement issues and will remain the primary destination for most other intellectual property matters. Nevertheless, the Texas Business Court’s expanded jurisdiction now includes IP ownership and licensing disputes as well as trade secrets cases and a variety of potential contract disputes involving software, data security, and biotechnology. Some parties may prefer to litigate such disputes in this new specialized state court dedicated to large business disputes.

Implications for IP Owners and Litigators

The expansion of the Business Court’s jurisdiction is likely to have several practical effects:

• Specialized Adjudication: Parties to complex IP disputes may benefit from judges with expertise in business matters.
• Efficiency: The Business Court’s procedures are designed to handle complex cases more efficiently than other state courts, potentially reducing time and costs for litigants. The Business Court also may be faster and less expensive than federal court.
• Venue Considerations: Businesses and IP owners will need to consider the Business Court as a strategic option when initiating or defending against IP-related litigation in Texas.

Next Steps

Governor Greg Abbott signed House Bill 40 into law on June 20, 2025. The bill will take effect on September 1, 2025, further solidifying Texas’s position as a major forum for business and intellectual property litigation.

In summary, the passage of HB 40 represents continued evolution in Texas’s approach to intellectual property disputes, offering new opportunities and considerations for businesses, innovators, and their legal counsel.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For questions, please contact a member of the Intellectual Property practice.

Meet Art

Arthur Gollwitzer combines experience gained as a federal prosecutor with nearly 30 years in private practice to represent clients in patent, copyright, trademark, and trade secret disputes, including jury trials and appeals. In addition to defending and enforcing intellectual property rights, Arthur is highly experienced in investigations and criminal litigation. Arthur writes and speaks frequently on patent litigation reform and other intellectual property issues.