IP Tech Knowledgy

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Proving Damages in Trade Secret Litigation

When a business’s trade secrets have been jeopardized through theft, misappropriation, or other inappropriate action, calculating and proving damages can be complex. When the case involves emerging technology, damages become even more difficult to calculate and prove for trade secret plaintiffs. The plaintiff bears the burden of proving the alleged theft or misappropriation of the trade secret caused the damages, which could include actual losses, unjust enrichment, and reasonable royalties for the unauthorized disclosure or use.

Generally, an emerging technology plaintiff must provide the “least speculative measure” of damages and must explicitly link (usually via expert testimony) the harmful conduct of the defendant with a concrete, verifiable loss to the plaintiff's business. Businesses claiming that their new and emerging technology trade secrets have been stolen or otherwise misappropriated should offer expert testimony encompassing the value of the entire business. The expert should also break down the business’s entire market value attributable to each of its trade secrets (if different), especially where the business has multiple marketable products which may utilize the allegedly stolen or misappropriated technology. Where the plaintiff alleges “delay to market” damages, expert witness testimony must credibly establish the existence of the undeveloped market.