Key Findings From Stout’s 2020 Trade Secrets Research Report

In April 2020, finance consulting firm Stout Risius Ross, LLC (“Stout”) published its 2020 “Trends in Trade Secrets Litigation Report.” The Report highlights several significant findings that are relevant to companies looking to protect and defend their trade secret assets: 

• Plaintiffs are winning cases. In 68% of trade secrets cases filed in federal district court cases from 1990 through 2019, the plaintiffs won favorable rulings.
• Large damages awards. In 52% of trade secret cases brought in federal court, the court awarded monetary damages. The damages were steep, totaling approximately $3 billion. The five largest awards were each over $100 million.
• Theft of customer lists and vendor/supplier information is the most litigated category of trade secret. Stout concluded that 37% of all cases filed from 1990-2019 concerned theft of this type “business relationship” information.
• Suits take 2.7 years to resolve. Trade secrets cases average 2.7 years from the filing of the complaint to the trial outcome. Stout did not indicate the number of settlements or the average time it takes a trade secrets case to settle out of court.
• Trade secret decisions are often appealed. Over 57% of the cases were appealed following the lower court’s decision.
• Rising trade secret litigation. From 2010 through 2015 (prior to enactment of the federal Defend Trade Secrets Act in 2016) approximately 1,100 trade secrets cases were filed per year. From 2017 to 2019, that jumped to approximately 1,400 cases per year. This trend is expected to continue.

These findings comport with Winston & Strawn’s Global Privacy & Data Security Task Force’s view of trade secrets litigation and protection. The Report highlights the importance of companies’ instituting compliance measures, including proactive protection and active monitoring. As theft of trade secrets litigation takes a front-seat in federal court, such cases will only continue to proliferate, meaning companies need to be well-positioned to both prosecute and defend such actions.