1. Large Damage Awards May Face Scrutiny. In 2024, courts issued several significant decisions concerning damages awards in trade secret misappropriation cases. Three recent federal court decisions overturned exceptionally large damages awards on the ground the plaintiff failed to prove causation between the proven misappropriation and the claimed damages. These cases illustrate that plaintiffs seeking recovery for misappropriation still have powerful tools at their disposal, including the potential for large damages awards and injunctive relief. But plaintiffs should consider taking care to show the causal nexus between the claimed damages and the proven misappropriation at trial.
  2. Noncompete Enforceability Limited. The Federal Trade Commission (FTC) under President Trump’s nominee, Andrew Ferguson, may well rescind the FTC ban on noncompete agreements and withdraw appeals in the Fifth and Eleventh Circuits. This action may prompt states that have allowed their own proposed noncompete legislation to languish (e.g. New York, Illinois) to refocus on narrowing the ability of employers to impose such restrictions. The health care space is expected to see more states narrowing the enforceability of noncompetes as well (such as Rhode Island, Pennsylvania, Maryland, Iowa). Within this unpredictable and inconsistent landscape concerning the enforcement of noncompetes, it is critical for companies to protect and defend their trade secrets.
  3. Plaintiffs Prevail in Trade Secret Trials. A recent analysis of federal trade secret cases that go to trial may be either alarming or heart-warming, depending on which side clients find themselves (see Stout’s “Trends in Trade Secret Litigation Report,” Nov. 4, 2024). The report’s findings include that out of 271 federal trade secret cases that went to verdict since 2017, 84% went in favor of the claimant. This may mean that more trade secret misappropriation filings will occur, and perhaps settlements before verdict will also be likely. Such settlements may reach higher amounts, further ratcheting up filings. As more cases are tried to verdict, the odds may stabilize toward more even outcomes, but clients and counsel should take note of these numbers.
  4. The AI Revolution Could Dramatically Affect Trade Secrets. AI may create innumerable systems, algorithms and other material that constitute trade secrets, raising a host of issues, like who owns them and how to protect them. AI also poses a threat to owners of trade secrets that can be reverse-engineered by AI but perhaps not nearly as easily (or at all) by a human. We expect the law to evolve to address ownership of trade secrets created by AI and to bolster protection against AI-generated reverse-engineering.
  5. Foreign Damages Are Available for Trade Secret Misappropriation. In 2024, the Seventh Circuit held that the federal Defend Trade Secrets Act (DTSA) has extraterritorial reach. This was the first circuit court in the country to find this explicitly. In so holding, the Seventh Circuit affirmed a nine-figure compensatory damages award that consisted entirely of the defendant’s foreign sales. All that is necessary to obtain foreign damages is an “act in furtherance” of the misappropriation in the United States, such as advertising products at a trade show that make use of the misappropriated information. Importantly, proximate causation between the act in the United States and damages is not required. The Seventh Circuit’s decision is likely to lead to an uptick in discovery battles over foreign damages and has the potential to increase damages in trade secret cases.
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Jordan Grotzinger Jordan Grotzinger

Jordan Grotzinger, Co-Chair of the Los Angeles Litigation practice, is a business trial lawyer focusing on trade secret law, FinTech and financial services litigation, entertainment litigation and consumer class action defense.

As creator and host of Greenberg Traurig’s Trade Secret Law Evolution Podcast

Jordan Grotzinger, Co-Chair of the Los Angeles Litigation practice, is a business trial lawyer focusing on trade secret law, FinTech and financial services litigation, entertainment litigation and consumer class action defense.

As creator and host of Greenberg Traurig’s Trade Secret Law Evolution Podcast, Jordan offers comprehensive summaries of and concrete takeaways on the latest developments and trends in trade secret law, including distinctions between the Uniform Trade Secrets Act (UTSA) and the Defend Trade Secrets Act (DTSA), what constitutes a trade secret, what’s required to maintain trade secret status, how to sufficiently identify trade secrets for purposes of pleadings and discovery, remedies for misappropriation and how to get them, and practical tips to protect these critical assets and litigate these cases. Working with his Knowledge Solutions group and other key team members, Jordan created this podcast to systematize his constant learning of this ever-important subject as it develops in real time and give listeners who need to stay current in this area an easy, digestible analysis of its latest and material developments in episodes short enough for a commute.

Jordan has tried jury and non-jury cases throughout California and has argued before the Ninth Circuit Court of Appeals and the California Court of Appeal.

Photo of Kurt Kappes Kurt Kappes

Kurt A. Kappes is the Managing Shareholder of the Sacramento Office and Co-Chair of the firm’s Labor & Employment Practice’s Complex Employment Litigation & Trials group. He has extensive lead trial experience in many complex litigation cases, including: class actions, commercial claims, trade…

Kurt A. Kappes is the Managing Shareholder of the Sacramento Office and Co-Chair of the firm’s Labor & Employment Practice’s Complex Employment Litigation & Trials group. He has extensive lead trial experience in many complex litigation cases, including: class actions, commercial claims, trade secrets and employee mobility, computer fraud, non-compete, unfair competition, and Business and Professions Code Section 17200 actions. He has also represented clients in labor and employment issues, including advisory matters, trade secret audits, contracts, discrimination claims, whistleblower cases, and wrongful termination litigation.

Recognized by Super Lawyers magazine, as one of Northern California’s Super Lawyers, Kurt has argued cases before the Ninth Circuit Court of Appeals, the California Supreme Court, and the Third District Court of Appeals. He has also represented clients before the United States Supreme Court, as well as in administrative hearings, arbitrations (single and panel), writ proceedings, jury trials, and bench trials.

Photo of Gregory S. Bombard Gregory S. Bombard

Gregory S. Bombard is a trial lawyer focusing on trade secret litigation, business torts, and other complex commercial disputes. Greg represents pharmaceutical, technology, and manufacturing companies in state and federal courts, as well as in arbitration proceedings throughout the United States. He regularly…

Gregory S. Bombard is a trial lawyer focusing on trade secret litigation, business torts, and other complex commercial disputes. Greg represents pharmaceutical, technology, and manufacturing companies in state and federal courts, as well as in arbitration proceedings throughout the United States. He regularly represents both plaintiffs and defendants in trade secret cases and related claims. Greg is a frequent writer and speaker on trade secret law and is the co-author of the book Protecting and Litigating Trade Secrets (2nd Ed.), published by the American Bar Association.

In addition to his trade secrets practice, Greg has deep experience defending consumer and business claims under the Unfair Trade Practice Acts of Massachusetts (Chapter 93A) and similar laws in other states. He has handled unfair trade practice litigation on behalf of banks, credit card processors, mortgage servicers, and other consumer finance companies.

Photo of Galit Kierkut Galit Kierkut

Galit Kierkut focuses her practice in the areas of restrictive covenants, privacy, and trade secret counseling and litigation, as well as in matters relating to employment discrimination, harassment, whistleblowing, employee leave and accommodation. She represents national and international employers in their U.S. operations…

Galit Kierkut focuses her practice in the areas of restrictive covenants, privacy, and trade secret counseling and litigation, as well as in matters relating to employment discrimination, harassment, whistleblowing, employee leave and accommodation. She represents national and international employers in their U.S. operations in the pharmaceutical, medical device, manufacturing, financial services, hospitality, food service, retail and health care industries in state and federal courts, as well as before the Equal Employment Opportunity Commission (EEOC) and various Departments of Labor. She also trains and counsels employers in virtually all employment compliance areas. Galit is a member of Greenberg Traurig’s Health Emergency Preparedness Task Force, a multidisciplinary, collaborative team drawn from the firm’s offices around the world that provides clients with up to date counseling on all COVID-19 related matters.

Photo of Justin Victor Justin Victor

Justin K. Victor is a trial lawyer who has assisted clients in recovering over $100 million in complex civil litigation. Mr. Victor has also secured temporary restraining orders, preliminary injunctions and permanent injunctions in state and federal court for clients seeking to protect…

Justin K. Victor is a trial lawyer who has assisted clients in recovering over $100 million in complex civil litigation. Mr. Victor has also secured temporary restraining orders, preliminary injunctions and permanent injunctions in state and federal court for clients seeking to protect against the misappropriation of trade secrets and to enforce restrictive covenants.

Mr. Victor has successfully defended clients facing claims totaling over $300 million. For example, Mr. Victor defends employers in class and collective actions arising under the FLSA and related state wage and hour laws. Mr. Victor also defends executives and board members in derivative and direct actions arising under state and federal law.

In addition to an active litigation practice, Mr. Victor counsels employers of all sizes in the design and implementation of employment policies, practices, proactive audits, and workplace training.

Photo of Emily Livermore Emily Livermore

Emily Livermore is a member of the Litigation Practice in Greenberg Traurig’s Los Angeles office.

Photo of Bryan Harrison Bryan Harrison

Bryan Harrison is a member of the Intellectual Property Litigation Practice in Greenberg Traurig’s Boston office. Bryan focuses his practice on trade secret, patent, and other intellectual property disputes. He also has experience handling general commercial litigation matters, including contract disputes, franchise disputes…

Bryan Harrison is a member of the Intellectual Property Litigation Practice in Greenberg Traurig’s Boston office. Bryan focuses his practice on trade secret, patent, and other intellectual property disputes. He also has experience handling general commercial litigation matters, including contract disputes, franchise disputes, payor-payee conflicts, and post-sale breach of warranty issues.

He is experienced in managing all phases of litigation, including drafting complaints, conducting and defending depositions, managing e-discovery, trial and post-trial briefings. He has deep experience in both federal and state courts, as well as in arbitration across the country and internationally. He represents both plaintiffs and defendants.

Bryan obtained an undergraduate degree in biochemistry. Before law school, he worked in a clinical genetics lab at Massachusetts General Hospital developing and validating genetic tests to diagnose cardiomyopathy and hearing loss.