Bump in Federal Trade Secret Litigation Seen in 2023: Report

Analytics from Lex Machina 2024 Trade Secret Litigation Report reveals a rise in trade secret cases filed in federal district court in 2023, along with the continued steady trend of trade secret cases that involved Defend Trade Secret Act (DTSA) claims.

Financial institutions and insurance companies were predominant on the list of the most active plaintiffs over the three years from 2021 to 2023.

The LexisNexis company’s report examines trade secret litigation trends in federal district and appellate courts. Focusing on the three-year period from 2021 to 2023, it surveyed emerging trends in case filings, venues, judges, law firms, attorneys, parties, timing metrics, case resolutions, findings and damages.

The report often focuses on different sets of data, e.g., filtering cases in order to provide analytics on general trade secret cases, trade secret cases excluding DTSA cases, and DTSA cases filed in the federal district courts, as well as trade secret cases docketed in the federal appellate courts.

“The ability to use Lex Machina to track changing litigation patterns and trends is exemplified in a practice area like trade secret litigation,” said Elaine Chow, Lex Machina’s trade secret legal data expert and editor of the report. “We can use Lex Machina’s multitude of filters to slice the data and analytics to see, for example, that trade secret case filings swung back up in 2023, and that the proportion of trade secret cases involving DTSA claims continued to rise. Legal practitioners can employ this information to derive the valuable data-driven insights most relevant to their own practice.”

In 2023, there were a reported 1,203 trade secret cases filed in federal district courts.

In the three-year period from 2021 to 2023, the highest number of trade secret cases was filed in the Central District of California, while Judge Yeakel from the Western District of Texas was the most active judge for trade secret cases.

In the three-year period from 2021 to 2023, Gordon Rees Scully Mansukhani was the most active law firm representing plaintiffs in trade secret cases.

Littler Mendelson defended clients in the highest number of trade secret cases during the three-period from 2021 to 2023.

For trade secret cases that were appealed to a federal appellate court and terminated from 2021 to 2023 with a decision on the merits of the appeal, 45 percent were ultimately reversed, the report found.

More than $511 million in Punitive/Willfulness Damages was awarded from 2021 to 2023.

The report metrics can assist readers in deciding who to pursue as clients, whether to file a particular motion or when to settle (and for how much).