According to Lex Machina’s 2018 Trade Secret Litigation Report, the number of trade secret cases pursued in U.S. federal courts has increased rapidly since the 2016 enactment of the Defend Trade Secrets Act (DTSA), which granted federal court subject matter jurisdiction over claims raised under the Act. Last year provided a number of interesting precedential decisions on various topics within the realm of trade secrets law, many of which will no doubt shape litigation tactics (and expectations) going forward. One decision of particular note came from the Federal Circuit Court of Appeals addressed to the issue of whether unjust enrichment claims were entitled to a jury determination. Although the case did not specifically deal with claims raised under the DTSA, it nonetheless could impact who is entitled to determine certain types of monetary remedies requested in trade secret cases.
The Federal Circuit, in Texas Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc., 895 F.3d 1304 (Fed. Cir. 2018), held that a plaintiff claiming trade secret misappropriation and seeking unjust enrichment damages (sometimes referred to as “disgorgement”) has no constitutional right to a jury decision on the amount to be awarded. There, the owner of a patent for ambient light sensors used in electronic devices sued a competitor for, among other things, misappropriation of trade secrets under Texas common law. Due to the timing of the claimed misappropriation, the plaintiff in Texas Advanced could not bring any statutory trade secret misappropriation claim, either under the DTSA or the then recently minted Texas adoption of the Uniform Trade Secrets Act. Nonetheless, this decision could foreshadow how federal courts will treat unjust enrichment claims sought in any trade secret matter, even beyond those sounding in common law.
As a general matter, equitable remedies, including injunctions and requests for contract specific performance, are the sole province of the court. Legal remedies, such as “compensatory damages”, are determined by the finder of fact, which is, more often than not, an empaneled jury. Specifically, our federal Constitution provides a wronged party the right to a jury trial on legal remedies where the value in controversy exceeds $20.
After a trial on the merits, the Texas Advanced court instructed the jury on, among other things, plaintiff’s unjust enrichment claim. Following deliberations, the jury awarded “damages” in the form of...
