Dear 

Trade secret civil filing in federal court is about to become law! The Senate version of the Defend Trade Secrets Act moved through the House Judiciary Committee on a voice vote, with no amendments, on April 20. Then a week later the bill was passed by the full House, again with no amendments. This means it will now go to the President, who has already indicated strong support for the bill.You can find timely updates on the legislation  here.

Thanks,
Jim 
 
The Billion-Dollar Trade Secret Verdict

Well, not quite. But $940 million is a lot of money, and that's how much a federal court jury awarded on April 15, 2016 to Epic Systems, a Wisconsin healthcare software company, against the U.S. subsidiary of Tata Consultancy, part of the Tata Group headquartered in India. There may be a lot of lessons to come out of this case - and we don't know if the jury's award will be reduced - but what I want to talk about today is inspired by that verdict: how is it that trade secret damages can be so large?
 
Of course, every case rests on a unique set of facts, and trade secret disputes typically involve allegations of treachery and deceit that can turn a jury's head. But at a time when proving damages in patent cases feels restricted by issues like extraterritoriality and the entire market value rule, it seems that trade secret verdicts keep going up. In a quick search of awards in the past five years, I've found eight (including the Epic case) of more than $25 million, and three of those were in the hundreds of millions.
 
What is it about trade secret damage law that allows such seemingly generous results? Mainly it's because trade secrets are grounded in tort principles, where the primary objective is to make the plaintiff whole, and where doubts are resolved against the wrongdoer.
 
Setting aside willfulness for the moment (while we await the Supreme Court's rulings in Halo and Stryker), patent law tries to calculate the rent due for no-fault infringement. Trade secret law, in contrast, tries to return the plaintiff to where it should have been but for the defendant's wrongful behavior. The difference makes trade secret damages harder to predict. For more details see my white paper, The Flexibility of Trade Secret Damages,  here.

Recent Updates

EU Parliament Votes to Approve the Trade Secret Directive
Following a contentious debate, the European Parliament voted April 14, 2016 to adopt the EU Trade Secret Directive with no further amendments. The Council is expected to formally adopt the Directive at its next meeting on May 17, 2016.

James Pooley Named to IP Hall of Fame
I am pleased to share with you the news of my induction into the IP Hall of Fame, which will be noted at a ceremony at the IPBC in June in Barcelona. I am gratified by this honor, and hope that it sheds more light on the importance of trade secrets. More Here
Recent Articles

My Articles:
(April 12, 2016, The Recorder)

Lawyers Ready to Reap Work From Federal Trade Secrets Act
(April 8, 2016, The Recorder)

"Trade Secret Bill Resolves 'Inevitable Disclosure' Controversy"
(Feb. 17 2016, Law360) 

"New Federal Trade Secret Law Would Protect Whistleblowers"
 (Feb. 5 2016, Law.com)
 

Forbes recommends my book  
Find all of my recent articles here .

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James Pooley | james@pooley.com | www.pooley.com
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