On May 25, 2023, the U.S. Court of Appeals for the Second Circuit in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc. issued a ruling severely limiting the availability of avoided costs as a measure of damages in trade secret cases brought under the Defend Trade Secrets Act (DTSA). — F. 4th —, 2023 WL 3636674 (2d Cir. May 25, 2023).
Avoided costs refers to “the costs a trade secret holder had to spend in research and development that a trade secret misappropriator saves by avoiding development of its own trade secret.” Id. at *13. Despite acknowledging that “avoided costs are recoverable as damages for unjust enrichment under the DTSA” and while affirming a jury’s finding of liability over Syntel’s misappropriation of TriZetto’s trade secrets, the Second Circuit vacated the jury’s award of $285 million in compensatory damages on the ground that avoided development costs was not an available measure of damages “under the particular facts of th[at] case.” Id. at *13, *17-18.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
