Texas Business Court Decision – May 13, 2025

No. 24-BC11A-0007 CreateAI Holdings, etc. v. Bot Auto TX, Inc. (Eleventh Division, J. Adrogue’

Civil case – Uniform Declaratory Judgments Act – Mirror Image Rule. In this action plaintiff alleged defendant had willfully and maliciously misappropriated technologies constituting trade secrets under the Texas Uniform Trade Secrets Act; plaintiff sought temporary and permanent injunctive relief preventing defendant from using the technologies; the application for a temporary injunction was denied, and days later defendant filed six counterclaims, including two that sought a declaration that plaintiff cannot establish imminent and irreparable injury and has not established that there is no adequate remedy at law; plaintiff sought to dismiss these two counterclaims under the mirror-image rule which precludes a defendant from asserting a counterclaim under the Uniform Declaratory Judgments Act which presents nothing more than a denial of the plaintiff’s claims.

The court dismisses these two claims because they solely operate to deny plaintiff’s pending claim for a permanent injunction; were plaintiff to dismiss its suit, a judgment favorable to defendant on these two counts would not result in the recovery of any benefit; since the two claims do not state a claim for affirmative relief, they run afoul of the mirror-image rule, and they must be dismissed. This is Rule 91 Memorandum Opinion explaining the court’s March 17, 2025 order granting plaintiff’s motion to dismiss the counterclaims.