When economic damage has occurred a result of trade secret misappropriation, engaging and working with an appropriate damages expert can be critical to obtaining appropriate relief. The following are three points for consideration the next time you are engaged in trade secret misappropriation litigation.
- Engage Early. Regardless of being on offense or defense, in litigation involving economic damages, consider engaging a damages expert early. An expert can help identify relevant areas of written discovery and suggest documents and information to affirmatively produce to support your damage theories (or defenses to same). Similarly, an expert may describe relevant lines of questioning for depositions targeted towards buttressing (or defeating) likely damage theories. In contrast, if engaged after written discovery has closed, your expert will be limited to the documents, information and testimony exchanged to that point.
- Vet Carefully. Not every case is the same and identifying an appropriate damages expert is a critical task. Some questions worth considering are: Has the expert previously had his or her opinions excluded in whole or in part? Does the jurisdiction of the case warrant retaining an expert local to the area? Are there prior opinions or testimony of the expert that may be used against the expert in your matter? Will your damages expert work well with your technical expert?
- Be Flexible. Both the Uniform Trade Secrets Act (adopted by the vast majority of states) and the federal Defend Trade Secrets Act of 2016 allow for the calculation of actual damages under a variety of different theories. Depending on the facts of the case, lost profits, diminution in business value, reasonable royalties, avoided costs, and other theories may be appropriate. Being flexible and creative in approaching the calculation of damages may lead to the optimum outcome. An experienced, knowledgeable damages expert can help identify an appropriate theory (or theories) depending on the specific facts of the case. It is worth discussing potential theories with your expert as early as possible, including at the vetting stage.