Courts have long lamented that “computing damages in a trade secret case is not cut and dry,” Am. Sales Corp. v. Adventure Travel, Inc., 862 F. Supp. 1476, 1479 (E.D. Va. 1994), meaning that “every [trade secret] case requires a flexible and imaginative approach to the problem of damages,” Univ. Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518, 538 (5th Cir. 1974).
The federal Defend Trade Secrets Act (“DTSA”) and virtually every state’s version of the Uniform Trade Secrets Act (“UTSA”) (only New York has not adopted the UTSA) permits recovery of damages for (1) actual loss caused by the misappropriation; (2) unjust enrichment that is not addressed in computing damages for actual loss; or (3) a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret. There has been little guidance from the courts, however, as to how to calculate these different, and sometimes competing damages calculations, many relying on the “flexible and imaginative approach” set forth in the Fifth Circuit’s 1974 pre-UTSA University Computing decision. Even more difficult is the case where a plaintiff’s damages are based on the defendant’s anticipated future use of the trade secret, given that those damages necessarily will involve speculation about the revenues the defendant will generate from its use of the trade secret.
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The United States District Court for the Eastern District of Louisiana recently held that, under the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq., information included in a patent application remains an actionable trade secret, thereby extending the time for potential misappropriation until the patent’s publication.
In Seyfarth’s 
Caramel Crisp LLC, the owner of Garrett Popcorn Shops (“Garrett”), the renowned Chicago-based purveyor of deliciously flavored popcorn, recently filed suit in federal court in Chicago against its former director of research and development, Aisha Putnam, alleging that she misappropriated the company’s trade secrets, including its recipes for Garret’s famous popcorn, after she was fired. Putnam was hired in 2014 and was eventually promoted to the role of Director of Research and Development, where she had access to some of Garrett’s most confidential information and trade secrets. In that role, she was required to sign a confidentiality and non-compete agreement, which, among other things, required her to return all of Garrett’s confidential information upon the termination of her employment.
A California federal district court recently granted a temporary restraining order (“TRO”) against a former employee for misappropriating proprietary and confidential information in violation of the Defend Trade Secrets Act (“DTSA”), the California Uniform Trade Secrets Act (“CUTSA”), and company confidentiality and non-disclosure agreements. Bemis Co., Inc. v. Summers, No. 219CV00344TLNKJN, 2019 WL 1004853, at *1 (E.D. Cal. Feb. 28, 2019).
Continuing our annual tradition, we have compiled our top developments and headlines for 2018-2019 in trade secret, non-compete, and computer fraud law.
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