The owner of a trade secret is entitled to recover damages for misappropriation, except where a material and prejudicial change of position prior to acquiring knowledge of misappropriation renders a monetary recovery inequitable.
Damages can include both the actual loss and unjust enrichment brought about by misappropriation. Alternatively, damages can be measured in terms of liability for a reasonable royalty. Where the misappropriation is willful and malicious, the court may award exemplary damages in an amount not to exceed twice the damage award. Furthermore, where there is willful and malicious misappropriation, or where a misappropriator makes a motion to terminate an injunction in bad faith, the court can award the trade secret owner reasonable attorneys’ fees. Where a claim for misappropriation is made in bad faith or a motion to terminate an injunction is resisted in bad faith, the accused misappropriator may be awarded reasonable attorneys’ fees.
There are criminal penalties for certain trade secret misappropriations. In fact, the laws of several states criminalize the theft of trade secrets, and the most significant criminal penalties are imposed by the Economic Espionage Act of 1996. If the trade secret is misappropriated with the intention or knowledge that the offense will benefit any foreign government, foreign instrumentality, or foreign agent, then an individual actor can be fined not more than $500,000 or imprisoned for not more than 15 years, or both, and an organization can be fined not more than $10 million. Generally, if the act is intended to injure the trade secret owner, or is done with the knowledge that injury will be the result, a fine up to $5 million or a prison sentence not to exceed 10 years, or both, can be imposed (18 U.S.C. §183).
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