Stout's 2024 Trade Secret Litigation Report Highlights Plaintiff Success Despite Declining Case Filings

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Nov 13, 2024, 08:43 ET

CHICAGO, Nov. 13, 2024 /PRNewswire/ -- Stout, a leading global advisory firm, has published its Trends in Trade Secret Litigation Report, revealing that despite a significant decline in trade secret case filings, plaintiffs are winning the majority of cases that reach judgment. According to the report, 81% of cases between 2017 and 2022 were decided in favor of the plaintiff, including 87% of trial verdicts.

While filings initially spiked following the passage of the Defend Trade Secrets Act (DTSA) in 2016, the number of cases has since largely plateaued. However, the high success rate for plaintiffs and the large damages awarded highlight the continued importance of trade secret protection.

Key findings from the report include:

Over 80% of cases with a judgment between 2017 and 2022 favored the plaintiff.
Average trade secret damages awards continue to grow, but the mean damages award is significantly higher than the median award due to a small number of very high outliers.
42% of trade secret cases included multiple types of trade secrets, with Business Relationships and Design being the most common categories.
Many of the largest trade secret damages awarded were appealed, with several of those appeals still pending as of the date Stout reviewed the data.

The report is based on an in-depth analysis of more than 9,600 federal trade secret cases filed between 2017 and 2022, focusing on those that reached a verdict or settlement. It provides valuable insights into litigation trends, including common types of trade secrets, plaintiff success rates, and the financial outcomes of these disputes.

"Trade secrets remain a key asset for businesses, and litigating the most valuable trade secret assets, while supporting that litigation with a robust analysis of economic damages, can yield significant rewards," said Kevin McElroy, Managing Director at Stout. "While the average trade secret damages awards are growing, these are with the median damages awards staying fairly constant since Stout's last report."

The report reveals that most trade secret cases involve multiple claims, such as contract breaches, fiduciary duty violations, and tortious interference. Frequently litigated trade secrets include customer lists, pricing strategies, and proprietary software.

For more information or to request a copy of the Trends in Trade Secret Litigation Report, please contact [email protected].

About Stout

Stout is a global advisory firm specializing in corporate finance, accounting and transaction advisory, valuation, financial disputes, claims, and investigations. We serve a range of clients, from public corporations to privately held companies in numerous industries. Our clients and their advisors rely on our premier expertise, deep industry knowledge, and unparalleled responsiveness on complex matters. Learn about our Relentless Excellence^® at stout.com.

Stout is a trade name for Stout Risius Ross, LLC, Stout Advisors SA, Stout Bluepeak Asia Ltd., Stout GmbH, MB e Associati S.r.l., Stout Park Ltd, and Stout Capital, LLC, a FINRA-registered broker-dealer and SIPC member firm. The terms "Stout" or the "firm" refer to one or more of these legally separate and independent advisory practices.

SOURCE Stout