23 Jul 2018

Trade Secret Litigation Report reveals 30 per cent rise

Trade secrets case filings jumped by more than 30 per cent in 2017 after passage of the Defend Trade Secrets Act.


The Trade Secret Litigation Report, published for the first time by the Legal Analytics platform Lex Machina, reveals trends and insights from litigation that encompasses more than 9,800 cases brought under state trade secret laws and the federal Defend Trade Secrets Act of 2016 (DTSA). The report reveals that trade secret case filings, after years of hovering around 900 cases per year, increased sharply in 2017 to 1,134 cases (a gain of more 30% over 2016) on the heels of the passing of the DTSA.

Top firms, highest damages

The report, which includes a DTSA filings chart from its passage on May 11, 2016 to June 30, 2018  broken down by quarter, shows DTSA filings appear steady since the second quarter of 2017, but are still only 64% of the overall 2017 filings. Top three plaintiff firms for cases filed from 2009 to 2018 Q2 are Littler Mendelson (201 cases), Jackson Lewis (133 cases) and Seyfarth Shaw (132 cases). Among defendant firms, Ogletree Deakins Nash Smoak & Stewart lead the list with 93 cases, followed by Jackson Lewis (89 cases) and Littler Mendelson (74 cases). In terms of damages, leading the list of top ten jury awards from 2009 to 2018 Q2 are the historically high $919,900,000 in actual damages/lost profits against Kolon Industries in E.I. du Pont de Nemours and Company v. Kolon Industries, Inc. et al (vacated on appeal); $74,6000,000 in actual damages/lost profits and punitive/willfulness damages against Caterpillar in Miller UK Ltd. et al v. Caterpillar, Inc.; and $70,000,000 in reasonable royalty damages against Neovasc, and Neovasc Tiara in CardiAQ Valve Technologies, Inc. v. Neovasc Inc et al.

Litigation strategy

A hot topic among litigators, trade secret law has had a raised profile since the passage of the DTSA and high-profile cases at tech companies like Apple, Uber and Google. Practitioners want to find out more about litigation strategy in these cases, and the report was published to shed light on a range of data, including data on findings of trade secret misappropriation under state law or the DTSA and findings related to trade secret ownership and validity, as well as defense. Other data includes the number of district court filings, injunctive relief metrics including timing analytics, findings and case resolutions, top law firms, and damages. Because there are no Nature of Suit (NOS) codes for trade secrets cases in PACER, the database of district court case filings, Lex Machina deploys natural language processing algorithms over millions of PACER documents across various NOS codes to identify trade secret-related terms. Cases filed with a trade secret Cause of Action (COA) code are also included. Karl Harris, President & COO of Lex Machina, said the report ‘gives legal professionals a wealth of new insights into this practice area, helping companies select counsel based on a proven track record and helping firms achieve better outcomes for clients.’