Trend Report: Trade Secret Cases Terminated in 2023

Claimants prevailed over claim defendants by a more than 3 to 1 margin in trade secret misappropriation cases that terminated between January 1 and December 31, 2023. This includes trade secret misappropriation cases under the federal Defend Trade Secrets Act (DTSA) (which also includes cases where misappropriation was alleged under the DTSA and state trade secret law) and cases where DTSA is not alleged and the only trade secret misappropriation allegations are under state law.

Of the 890 cases with DTSA or with DTSA and state trade secret claims that terminated in 2023:

• Claimants prevailed 18 percent of the time, primarily at
  • consent judgment (12 percent);
  • trial (3 percent);
  • default judgment (2 percent); and
  • summary judgment (1 percent).
• Claim defendants prevailed 5 percent of the time, primarily at
  • judgment on the pleadings (3 percent); and
  • summary judgment (2 percent).

Of the 247 cases with state trade secret misappropriation claims (but not DTSA claims) that terminated in 2023:

• Claimants prevailed 13 percent of the time, primarily at
  • consent judgment (5 percent);
  • trial (4 percent);
  • summary judgment (2 percent); and
  • default judgment (2 percent).
• Claim defendants prevailed 4 percent of the time, primarily at
  • summary judgment (3 percent); and
  • judgment on the pleadings (1 percent).

For cases that terminated during this time period, the median time to milestones such as summary judgment, trial, and termination was longer in cases with trade secret misappropriation claims under state law only than in cases where DTSA or DTSA and state trade secret misappropriation claims were alleged:

• For cases with state trade secret claims, the median time to summary judgment was 924 days and the median time to trial was 1,281 days. The median time to termination was 424 days.
• For cases with DTSA or DTSA and state trade secret misappropriation claims, the median time to summary judgment was 672 days and median time to trial was 986 days. Overall, the median time to termination was 337 days.

Finally, injunctive relief was granted on the merits more often than not in trade secret cases that terminated during the time period. (This excludes injunctive relief by default and consent judgments.)

• For cases with DTSA or DTSA and state trade secret claims, the grant/deny rates were:
  • for temporary restraining orders, 63 percent to 37 percent
  • for preliminary injunctions, 58 percent to 42 percent
  • for permanent injunctions, 75 percent to 25 percent
• For cases with state trade secret claims only, the grant/deny rates were:
  • for temporary restraining orders, 57 percent to 43 percent
  • for preliminary injunctions, 52 percent to 48 percent
  • for permanent injunctions, 67 percent to 33 percent

For more Legal Analytics about trade secret misappropriation in federal court, stay tuned for Lex Machina’s 2024 Trade Secret Litigation Report, scheduled for later this summer.