Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: August 2, 2018
The Firm
201-896-4100 info@sh-law.comFrom disgruntled employees walking out the door with confidential computer files to hackers breaching computer systems in hopes of obtaining valuable data, technology has made trade secret theft easier and more prevalent. Trade secret litigation is also on the rise, in large part due to the enactment of the Defend Trade Secrets Act (DTSA) of 2016. The DTSA created a federal cause of action for trade secret misappropriation, giving companies a powerful new tool to enforce their intellectual property rights.

U.S. businesses lose billions of dollars every year due to trade secret theft at the hands of employees, competitors, and even foreign governments. Prior to the DTSA, victims of trade secret misappropriation could only bring civil suits under a patchwork of state laws.
The Defend Trade Secrets Act aims to provide uniform remedies for misappropriation of trade secrets. The key provision of the DTSA provides that “an owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”
Among other remedies, the DTSA provides for injunctive relief to prevent any actual or threatened misappropriation of trade secrets. Unlike state laws, the federal statute allows trade secret owners to seek a civil seizure “to prevent the propagation or dissemination of the trade secret.” When “exceptional circumstances” exist that render injunctive relief “inequitable,” courts are also authorized to order the defendant to pay a reasonable royalty for the continued use of the trade secret.
Once the court determines that a trade secret has been unlawfully misappropriated, the owner is entitled to compensatory damages, which may include (i) actual loss of the trade secret; (ii) any unjust enrichment; or (ii) a reasonable royalty for the use. Punitive damages are available when a trade secret is “willfully and maliciously misappropriated,” while attorneys’ fees are available in cases of bad faith.
Given that the DTSA is relatively new and state cases are difficult to track, there has not been a lot of data available regarding trade secret litigation. To provide greater insight, Lex Machina, a legal analytics company, recently launched a new platform devoted to trade secret litigation. The data currently encompasses more than 9,600 cases involving trade secret litigation pending in federal court since 2009, including those filed under the DTSA.
An analysis from Lex Machina revealed several interesting trends, including:
The above trends confirm that the case law surrounding the DTSA is still evolving, with many federal judges not yet experienced with trade secret misappropriation claims. Nonetheless, the novelty of the federal claim should not deter trade secret owners from taking action, given the relative likelihood of success and the legal remedies available.
According to the Lex Machina analysis, the majority of trade secret misappropriation defendants are employees, highlighting the need for companies to safeguard their proprietary information with non-disclosure agreements and other legal tools. It also strongly suggests that companies can benefit from working with law firms that have significant experience in both Labor & Employment and Intellectual Property Law.
If you have any questions or if you would like to discuss the matter further, please contact me, Jason LaBerteaux, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
Author: Wendy Rubinstein Quiroga

A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena

Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall

A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel

When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo

Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!