ILLINOIS GENERAL ASSEMBLY CONSIDERING DRAMATIC CHANGES TO TRADE SECRETS ACT - INCLUDING MANDATORY ATTORNEYS' FEES
A new bill recently introduced in the Illinois State Senate would dramatically change the Illinois Trade Secrets Act (765 ILCS 1065/1 et at.) and alter the landscape of trade secret litigation in Illinois. The bill, SB 2149, requires a party asserting trade secret misappropriation to serve on the opposing party, before commencing any written or oral discovery, a written statement that describes "with reasonable specificity the trade secrets which have allegedly been improperly used, disclosed or misappropriated." The bill requires a party to obtain leave of court to supplement its written statement and 180 days after submitting its statement to identify additional trade secret misappropriation. More importantly, any court that allows a party to amend its written statement must also enter an attorneys’ fees award against the amending party for attorneys’ fees the opposing party incurred as result of the amended statement.
In addition, the new bill allows the prevailing party to recover its attorneys’ fees and also orders the court to award attorneys’ fees if:
a. the court finds that a party submitted a written statement of trade secrets which was false, knowingly inaccurate, or "which it knew or should have known was objectively unreasonable in scope;"
b. the court finds that a party resisted a motion to dissolve an injunction without reasonable cause based in law or fact; or
c. a party amends their written statement and, in doing so, abandons previously disclosed trade secrets.
Finally, the proposed bill allows the court to award attorneys’ fees if the court:
a. finds that a damages claim for trade secret misappropriation is "objectively specious and has been maintained without substantial proof of economic injury approximately caused by improper use;"
b. modifies an injunction because the injunction is "impermissibly overbroad, vague or ambiguous;"
c. finds that a request for injunctive relief is substantially greater than what is necessary to protect "legitimate economic interests" regarding the improper use, disclosure or misappropriation of trade secrets.
We will continue to monitor this bill and its progression through the Illinois General Assembly.
