The Biggest Trade Secrets Awards In The Last 5 Years

Kirkland's IP practice advised The TriZetto Group Inc. and Motorola Solutions Inc. in two cases highlighted by Law360 among the top 10 trade secret cases with the highest damages awards since 2019. 

Trade secrets cases are having a moment in the spotlight in intellectual property litigation, thanks to some gargantuan damages awards over the past five years.

In state and federal courts, judgments have ranged from hundreds of millions of dollars to as much as $2 billion, but with a caveat — many of the awards have been reduced on appeal.

Boosted by the passage of the Defend Trade Secrets Act in 2016, trade secrets litigation has gradually increased over the past decade, becoming an attractive alternative to patent litigation in certain instances, according to IP attorneys.

Part of the goal of the DTSA was to create uniformity in the court system for trade secret causes of action, but calculating damages is still a challenge as jurors and judges try to determine how to apportion what they think is just compensation for the misappropriation of trade secrets.

"While we are seeing some large awards getting cut down, I think the general impression is that [trade secrets] law doesn't have the decades of history that patent law does, so there is more flexibility for good lawyering," said Ching-Lee Fukuda, a partner at Sidley Austin LLP and head of its New York IP litigation practice.

Multibillion-dollar judgments have not been uncommon in patent litigation in recent years, although it is also typical for judgments to be reduced on appeal. Last year did not see any awards in the billions, however, and the largest patent verdict of 2023 stood for less than two weeks — ClearPlay won $470 million after accusing Dish Network of infringing patents related to technology for editing out sex and swearing in movies, but U.S. District Judge David Nuffer in Salt Lake City granted Dish's motion for judgment as a matter of law, wiping out the award and verdict in March 2023.

The following five cases are all in the top 10 for the highest damages awards since 2019 where trade secrets were one of the main causes of action, according to federal court data from Lex Machina and Law360 reporting on state court awards.

Pegasystems Inc. v. Appian Corp.

Appian Corp. landed an eye-popping $2 billion award from a Virginia state jury in May 2022 after suing software company Pegasystems Inc. for allegedly stealing its trade secrets.

Both companies make software for companies to develop their own applications, and Appian's complaint alleged its rival "engaged in an unlawful campaign of corporate espionage" as part of a scheme to steal its trade secrets. Appian alleged Pegasystems gained access to its software by hiring an employee of a government contractor who used Appian software.

Pegasystems is appealing to the Virginia state appeals court, calling the case "a trade secrets case with no secrets" and saying Appian never specifically identified what its purported trade secrets are. Pegasystems also maintains that it never implemented or copied any of Appian's products.

Pegasystems wants a new trial, or for the appeals court to enter judgment in its favor. The appellate case was argued in November 2023.

As a result of the case, the company is also facing an investors' suit for allegedly failing to properly disclose the trade secret litigation.

The case is Pegasystems Inc. v. Appian Corp., case number 1399-22-4, in the Court of Appeals of Virginia.

Syntel Sterling Best Shores Mauritius Ltd. v. The TriZetto Group Inc. et al.

Software company TriZetto Group won an $855 million verdict in October 2020 when a Manhattan jury concluded that fellow software business Syntel Inc. misappropriated trade secrets and infringed the copyright of a platform to process insurance claims. The jury awarded TriZetto $284.8 million in damages plus $569.7 million in punitive damages, but those amounts have since been reduced.

First, U.S. District Judge Lorna G. Schofield reduced the punitive damages award from $569.7 million to $285 million in April 2021, saying jurors' calculation for punitive damages was excessive. Judge Schofield further reduced the award March 13, cutting $142 million connected to a New York state trade secrets misappropriation claim and $59.1 million tied to copyright infringement.

In last week's decision, Judge Schofield said the New York trade secrets award had "no reasonable relation to the actual harm TriZetto suffered," and that the $59 million for copyright infringement would not be considered a reasonable licensing fee by a fact-finder.

The award currently stands at just over $300 million, with $285 million in punitive damages and $14.5 million in attorney fees. The total is expected to increase with post-judgment interest and compensatory damages, which are still being litigated in district court.

As part of the litigation, TriZetto secured an injunction barring Syntel from using any of its trade secrets.

The case is Syntel Sterling Best Shores Mauritius Ltd. v. The TriZetto Group Inc. et al., case number 1:15-cv-00211, in the U.S. District Court for the Southern District of New York.

Motorola Solutions Inc. et al. v. Hytera Communications Corp. Ltd.

An Illinois federal jury awarded Motorola Solutions LLC roughly $764 million in February 2020 in a trade secrets suit that accused Chinese rival Hytera Corp. of stealing thousands of confidential files so Hytera could build a competing two-way digital radio. Jurors deliberated for about two hours before finding Hytera liable for misappropriating Motorola's trade secrets and infringing its copyrights.

An Illinois federal judge subsequently reduced the award to just over $540 million in 2021, in part by reclassifying $136 million as Hytera profits instead of Motorola losses, which affected how other parts of the award were calculated to avoid double recovery.

Hytera is appealing the verdict to the Seventh Circuit, which heard arguments in December. The three-judge panel hearing the case signaled it might further reduce the award over the disgorgement of profits from foreign sales.

The case is Motorola Solutions Inc. et al. v. Hytera Communications Corp. Ltd., case number 22-2370, in the U.S. Court of Appeals for the Seventh Circuit.

Taxinet Corp. v. Santiago Leon

Taxinet Corp. won $300 million in December 2021 from a Miami federal jury on an unjust enrichment claim against a onetime business partner for a mobile taxi-hailing service that was to be launched in Mexico City.

Taxinet sued Santiago Leon, a former Mexican congressman, claiming he got an official concession from the government of Mexico City in late 2015 for the taxi-hailing service by using Taxinet's "business plan, know-how, and technology." However, Taxinet alleged that Leon cut the company out of the deal to launch his own ride-hailing service under a different name.

U.S. District Judge Federico A. Moreno reversed the jury's verdict and its award, saying it was "based on hearsay and speculation" and that "the evidence is insufficient to support a finding of damages, let alone the verdict in this case."

Taxinet is appealing to the Eleventh Circuit, asking that the verdict and award be reinstated or that there be a new trial. Arguments in the case were held in 2023.

The case is Taxinet Corp. et al. v. Santiago Leon, case number 22-12335, in the U.S. Court of Appeals for the Eleventh Circuit.

Computer Sciences Corp. v. Tata Consultancy Services Ltd. et al.

Information technology company Computer Sciences Corp. won a $210 million verdict from a Texas federal jury that found Tata Consultancy Services Ltd. stole CSC's source code and documentation for life insurance software.

Jurors concluded in November that Tata and its employees "willfully and maliciously" misappropriated parts of CSC's Wealth Management Accelerator and CyberLife products to try to create its own system to administer and market policies.

CSC sued in 2019, alleging Tata employees who had access to CSC's system illegally used its software to develop Tata's new system. The jury awarded CSC $70 million for unjust enrichment and $140 million in exemplary damages, for a total of $210 million.

This was not the first time Tata, an India-based company, has had a substantial damages award entered against it. In 2016, a Wisconsin jury awarded Epic Systems Corp. $940 million after finding that Tata improperly downloaded thousands of pieces of confidential information from its competitor. That award was eventually reduced to $280 million.

In February, Tata asked the district court to enter judgment in its favor or, alternatively, to only award CSC $1.6 million in compensatory damages.

The case is Computer Sciences Corp. v. Tata Consultancy Services Ltd. et al., case number 3:19-cv-00970, in the U.S. District Court for the Northern District of Texas.