The Defend Trade Secrets Act (DTSA) granted parties the right to pursue trade secret claims and damages in federal courts as opposed to only state courts. Damages available to a plaintiff under federal law are similar to damages under state law and damages awards may be just as substantial. In a Texas District Court decision in 2018 (Title Source, Inc. v Housecanary, Inc.) the Court awarded the Defendant and Counterclaim Plaintiff HouseCanary, damages of nearly $740 million, including punitive damages, interests and fees for misappropriation of trade secrets arising from a breached NDA.
However, there can be differences depending on the venue. In E.J. Brooks Co. v Cambridge Security Seals, the Second Circuit Court of Appeals asked the Court of Appeals of New York, if under New York law, damages for misappropriation of trade secrets may be based on the infringer’s avoided development costs and in a split decision, the Court of Appeals decided that defendant’s development costs are not an appropriate form of damages in New York despite the minority opinion that this decision runs counter to other circuits which have previously held that saved costs, or the head-start theory, can be an appropriate damages methodology.
Regardless of venue, care should be exercised to ensure that a trade secret is succinctly expressed and not overly broad. It is important that the value of a given trade secret is not overstated and that if more than one is involved, that the appropriate value is attributed (apportioned) to each trade secret that is claimed (Waymo LLC v Uber Technologies, Inc., Ottoman LLC and Otto Trucking LLC).
To explore this topic and how it could influence your case, please contact Justin Lewis at +1 415 946 2610 or justin.lewis@jsheld.com.