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The recent decision by the U.S. Court of Appeals, Sixth Circuit, Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., illustrates the flexible approach taken by courts when considering the calculation of compensatory damages in trade secrets cases. No. 21-5345, 2022 WL 16846585 (6th Cir. Nov. 10, 2022) There, the Sixth Circuit affirmed a jury’s compensatory damages verdict which awarded the plaintiff its research and development costs for its misappropriated trade secret even though the underlying trade secret was not destroyed through disclosure or other means. Id. at *15.
Continue Reading Reap What You Sow – Sixth Circuit Affirms Recovery of Research and Development Costs to Agricultural Company in Trade Secret Case

Should a defendant found liable for stealing trade secrets have to fork over all of the research and development costs it theoretically avoided by misappropriating the secrets? Yes, according to the “avoided costs” theory of unjust enrichment that is gaining traction and resulting in large verdicts in DTSA and UTSA cases around the country.[1] 
Continue Reading The Developing “Avoided Costs” Remedy in Trade Secret Litigation

While preliminary injunctions are not uncommon in trade secrets misappropriation cases, a recent Fifth Circuit decision highlighted the importance that the movant put forth colorable evidence of misappropriator “use” of the trade secrets in preliminary injunction cases. In CAE INTEGRATED, L.L.C.; Capital Asset Exchange and Trading, L.L.C. v. MOOV TECHNOLOGIES, INCORPORATED; Nicholas Meissner — F.5th — (2022) 2022 WL 3210358 , the Fifth Circuit affirmed denial of a preliminary injunction for the lack of evidence showing such use. In this case, CAE sued Meissner, a former employee, and MOOV, his subsequent employer, for trade secret misappropriation in the Western District of Texas under the Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secrets Act (TUTSA). CAE also moved for a preliminary injunction, which was denied. CAE appealed that denial in the Fifth Circuit.
Continue Reading Insufficient Evidence: Fifth Circuit Affirms Denial of Preliminary Injunction for Trade Secret Misappropriation

Trade secret litigation presents a variety of procedural and practical complexities at every stage of the proceeding. One of the most important—yet often overlooked—issues in these cases can be summarized by the following question:
Continue Reading Signed, Sealed, Delivered? Fifth Circuit Finds Sealing of Sensitive Information Requires Far More Than a Protective Order

A recent decision from the Eastern District of California illustrates the sometimes fine line between the need for plaintiffs to allege a claim for trade secret misappropriation in sufficient detail,…
Continue Reading Dairy, LLC v. Milk Moovement, Inc.: Identifying Software Trade Secrets With Particularity to State a Claim for Trade Secret Misappropriation

The Eastern District of New York recently highlighted the importance of maintaining the confidentiality of trade secrets where the underlying trade secrets are readily apparent to anyone interacting with the holder’s product.
Continue Reading Preserving Trade Secrets By Taking Additional Protective Measures In Your Licensing Agreement

On January 24, 2022, the Federal Circuit affirmed the grant of a preliminary injunction blocking the publication of a patent application on the basis that it contained the plaintiff, Masimo Corp.’s trade secrets. Masimo Corp. v. True Wearables, Inc., No. 2021-2146, 2022 WL 205485 (Fed. Cir. Jan. 24, 2022). The Court of Appeals did so despite evidence that a widely circulated and cited paper on statistics had disclosed an equivalent algorithm, because the defendant failed to show that others in Masimo’s particular field (or a related field) were aware of the paper.
Continue Reading Federal Circuit Deems Algorithm Potentially Valid Trade Secret Notwithstanding Prior Publication

In a recent decision from the U.S. District Court for the District of Florida, a healthcare product manufacturer’s claim of trade secret misappropriation against a competitor and a customer was thrown out on summary judgement.  While the plaintiff showed that at least some defendants had access to the plaintiff’s alleged trade secret protected CBD cream formula and manufacturing process, the plaintiff failed to demonstrate that the defendants’ accused CBD cream product was manufactured using the alleged trade secret.  Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC, No. 9:20-cv-81501-Matthewman, 2021 U.S. Dist. LEXIS 206871 (S.D. Fla. Oct. 27, 2021).
Continue Reading Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC – A Cautionary Tale: Meticulous or Careless Strategy Required to Prove Your Trade Secret Claim

Whether a court order is appealable is often the first issue analyzed by appellate attorneys. An interlocutory order is an order issued by a court while a case is pending. These orders are not a final disposition of the case, but some interlocutory orders may be appealed even while the litigation continues. California law generally holds that “[t]o qualify as appealable, the interlocutory order must be a final determination of a matter that is collateral—i.e., distinct and severable—from the general subject of the litigation.”[1]
Continue Reading Trade Secret Misappropriation: Denial of Motion for Attorneys’ Fees under CUTSA is Not an Appealable Order

A recent decision by the Ninth Circuit Court of Appeals in BladeRoom Group Limited v. Emerson Electric Co. further stresses the importance of carefully crafting the terms and conditions in a non-disclosure agreement (“NDA”), and ensuring there is no ambiguity as to when the NDA’s confidentiality protections expire.  The Court in Bladeroom reversed a multi-million dollar judgment for the plaintiff, based largely on the Court’s differing interpretation of the duration of the confidentiality obligations under the NDA.
Continue Reading A Cautionary Tale on Including an Expiration Date in NDAs

Trade secrets and patents offer very different forms of protection, with different pros and cons. A trade secret may last indefinitely, while a patent has a fixed term of 20 years. Independent reinvention is permissible under trade secrets, but not with patents. And of course to obtain a patent, one must disclose the claimed invention to the public, in sufficient detail to enable one skilled in the relevant technology to make and use the invention.
Continue Reading Trade Secret vs. Patent – a False Dichotomy