Trade secret enforcement is a growing frontier for intellectual property litigation. While patent litigation has long been the incumbent, over the course of the past decade or so we have seen significant unpredictability for patentees in asserting patents, defending their validity, and maintaining large awards on appeal. Trade secrets present an avenue for companies looking to protect their intellectual property without these growing hurdles. Recent verdicts in the nine-to-10-figure range demonstrate the potential for blockbuster awards in cases of trade secret misappropriation including for claims brought under the Defend Trade Secrets Act (DTSA). Indeed, a recent report indicates that 68% of all federal trade secret cases that went to trial in 2020 received verdicts in favor of the trade secret plaintiff.
According to the Lex Machina 2023 Trade Secret Litigation Report, while the number of federal trade secret claim filings has remained relatively constant since the enactment of the DTSA in 2016, 80% of trade secret cases filed in 2022 include a DTSA claim. This rise of DTSA claims is expected to continue. The combination of plaintiff-favorable outcomes and large damages awards makes trade secret litigation a potent option for intellectual property protection and enforcement. The expected increase of DTSA claims can also be attributed in part to the current patent litigation landscape, including varying application of the Section 101 Alice framework, the potential of a litigation stay pending invalidity challenges at the Patent and Trial Appeals Board (PTAB), increasing strength of other invalidity challenges such as enablement and obviousness-type double patenting, and high rates of vacatur or remand of large patent damage awards at the Federal Circuit.
