TRADE SECRET DISPUTES: QUANTIFYING DAMAGES
CD: How would you characterise the current trade secret disputes landscape? As companies endeavour to protect their intellectual property (IP), to what extent are you seeing a rise in related cases?
Browning: I have seen a large increase in the number of trade secret disputes. Ten years ago, most intellectual property (IP) cases involved patent litigation in US district courts or at the US International Trade Commission. There was also a smattering of copyright and trademark-related disputes. I rarely saw cases involving claims of trade secret misappropriation. In recent years, however, I have seen many more trade secret cases, and some of those have involved substantial damages claims. The fact that juries have awarded damages in the tens and hundreds of millions of dollars in some cases has no doubt encouraged more trade secret case filings. Also, by broadening the definition of a trade secret and providing easier access for trade secret owners to federal courts, the passage of the Defend Trade Secrets Act of 2016 (DTSA) has effectively made it easier to bring misappropriation cases.
Doan: Many theft of trade secrets cases involve allegations that former employees violated restrictive covenants by taking protected information to their new place of employment. On 23 April 2024, the Federal Trade Commission (FTC) issued its final rule enacting a nationwide ban on certain employee non-compete agreements, which will become effective on 4 September 2024. The ban on non-competes shifts the focus even further toward trade secret protection when employees migrate. As a result, we are likely to see an even greater increase in trade secret misappropriation claims involving departing employees.
Jul-Sep 2024 issue
Analysis Group, Inc.