SIGNIFICANT FIFTEENTH COURT OF APPEALS DECISION: Create AI Holdings, Inc. v. Bot Auto TX Inc., 2026 WL 2694693 (Tex. App.-15th. Dist. September 15, 2026).
Introduction
This case involves the intersection between the rapidly evolving AI technology and The Texas Uniform Trade Secrets Act.
Factual Background
This trade secrets case involves two technology startups and autonomous trucking technology. Plaintiff, CreateAI was formed in 2015 and initially focused on autonomous trucking (18-wheelers driving down the interstate with no human driver). By 2022, internal turmoil reigned and CreateAI’s co-founder and CEO, Dr. Xiaodi Hou, was forced out. Shortly thereafter, Dr. Hou started up defendant, Bot Auto, launching an initial round of fundraising to pursue commercially viable autonomous trucking.
Importantly, in this same time period, CreateAI grew disillusioned with the autonomous trucking, closed down its U.S. operations, and turned its attention to its Chinese and Australian subsidiaries. By the end of 2024, CreateAI had effectively left the autonomous trucking market and redirected its business to AI-powered digital entertainment crafted primarily for Asian markets.
Nevertheless, CreateAI sued Bot Auto under the Texas Uniform Trade Secrets Act for misappropriating its trade secrets seeking monetary and injunctive relief. More specifically, CreateAI alleged three acts of misappropriation: (1) theft of its “sensor” technology, the “eyes and ears” of a self-driving vehicle; (2) theft of its “decision-making” technology, the “brain” of a self-driving vehicle; and (3) theft of its “safety technology” the “nerve system” of a self-driving vehicle. In this case the safety technology centered on a redundant braking method.
Fifteenth Court of Appeals Ruling
After discussing the well-known heightened standard for receiving injunctive relief, the court of appeals held that CreateAI had failed to show misappropriation. As to the “sensor” technology, the court of appeals found that it was not a trade secret because CreateAI had publicized the exact locations and varieties of its sensors at an investor presentation in 2022. Additionally, it is not a secret because “each sensor is housed on the outside of the truck in plain sight.” CreateAI Holdings, Inc. at * 3. As the court of appeals stated, “[a]n external sensor array on a self-driving vehicle may be no more secret than side-view mirrors of a traditional vehicle.” Id. Lastly, the court of appeals held no misappropriation because the technology had advanced so rapidly that Bot Auto’s sensor array used technology, materials, and processes that were unavailable when CreateAI was developing its sensor array.
As to the “decision-making” technology, the court of appeals found that, apart from using the same “green cases” (meaning scenario where truck could perform liability-free maneuver) versus “red cases” (where truck could not perform liability free maneuver), Bot Auto’s decision-making technology used a more advanced “transformer neural network” rather than CreateAI’s older “convolutional neural network.” Again, the rapid evolution of AI technology was a factor in defeating CreateAI’s misappropriation claim.
As to the “safety technology,” the court of appeals stated that “[r]edundancy itself is not a trade secret; it is merely a general principle derived from the fact that no one wants robot trucks with faulty brakes.” Id. at * 5. In addition, the court of appeals noted that CreateAI had “itself publicized its use of a CAN bus system in an investor presentation in 2022.” Id.
Accordingly, the court of appeals held that the trial court did not abuse its discretion in denying injunctive relief and that any injury, such as lost licensing agreements (which would pay royalties) could be calculated and compensated with money damages. Hence, injunctive relief would be improper.
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