Trade Secret Litigation Trends Reveal Important Timing and Budgetary Considerations

Lex Machina’s recent Trade Secret Litigation Report offers insights into trade secret litigation trends based on data culled from over 9,800 cases brought under state trade secret laws and the federal Defend Trade Secrets Act of 2016 (DTSA).

In addition to revealing the benefits of proactive protection of trade secrets, the Report provides statistics related to the timing of common trade secret litigation remedies, including temporary restraining orders, preliminary injunctions, and permanent injunctions. The Report states “[k]nowing the lower and upper bounds of how long it may reasonably take the case to reach injunction can give both counsel a strategic advantage over opponents lacking such nuanced information.” For example, Lex Machina found:

• the median time for courts to grant a temporary restraining order was six days (denials took 12 days);
• the median time for courts to grant a preliminary injunction was 47 days (denials took 106 days); and
• the median time for courts to grant a permanent injunction was 216 days (denials took 916 days). 

The data in the Report can assist in-house and outside counsel alike in comprehensively considering the timing of a trade secret case, which impacts both budgetary and business concerns. Pairing this data with the Report’s findings that temporary restraining orders were granted in approximately 70% of cases, preliminary injunctions were granted in approximately 60% of cases, and permanent injunctions were obtained in only 10% of cases will help position companies to assess not only the cost of trade secret litigation, but the likelihood of success based on the reported timeline.

TIP: Companies should seek advice from counsel promptly after trade secret theft is suspected to assess the strengths and weaknesses of potential claims, including seeking immediate relief through a temporary restraining order, and plan for possible budgetary and business contingencies.