TXO Production Co. & Marathon Oil Co. v. M.D. Mark, Inc.
Texas Court of Appeals
999 S.W.2d 137 (1999)

- Written by Kelli Lanski, JD
Facts
TXO Production Co. (TXO) (defendant) was an oil and gas company and wholly owned subsidiary of Marathon Oil Co. (Marathon) (defendant). TXO contracted with PGI, a company that conducted seismic surveys, to use certain survey data. The contract contained a nondisclosure agreement prohibiting TXO from selling PGI’s data or making it available to third parties. Marathon merged with TXO, and TXO informed PGI that PGI’s survey data would be automatically transferred to Marathon pursuant to Texas merger law. PGI asked Marathon to pay a transfer fee to use the data. Marathon never paid. Eventually, M.D. Mark, Inc. (Mark) (plaintiff) acquired the rights to PGI’s data and sued TXO and Marathon for breach of contract, among other claims, based on Marathon’s refusal to pay the transfer fee. TXO and Marathon filed a motion for summary judgment, arguing that their merger did not constitute a transfer of data to a third party in violation of TXO’s contract with PGI and there was therefore no breach of contract. The lower court held that the merger did constitute a prohibited transfer of data in breach of TXO and PGI’s contract and denied TXO and Marathon’s motion on that claim. TXO and Marathon appealed.
Rule of Law
Issue
Holding and Reasoning (Yates, J.)
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