I’m willful and malicious before my first coffee.
In trade secret litigation, if the defendant is found to have acted in a “wilful and malicious” manner, the damages can go from big to stunning. A judge can decide to award attorney’s fees and exemplary punitive damages, bringing the total to three times the initial amount. That can be many tens or hundreds of millions of dollars in large cases. Real money!
A recent example is the Propel Fuel v. Phillips 66 litigation regarding trade secrets obtained during an aborted M&A due diligence. The jury awarded $605 million in damages, and the court found the behavior to be willful and malicious, potentially increasing the damages to a staggering $1.8 billion. This very nearly rivals the initial $2 billion in damages from the Appian v. Pegasystems trade secret litigation which also found that the defendant acted in a wilful and malicious manner.
Of course both the federal DTSA and state UTSA do not clearly define what “willful and malicious” means.
Recent litigation in Massachusetts took great steps towards clarifying this issue. KPM Analtics North America sued Blue Sun Scientific, Innovative Technologies Group, and four former employees for trade secret misappropriation under both DTSA and MUTSA (Massachusetts UTSA).
KPM was largely successful at trial and asked the court to find that the theft was “willful and malicious” and to award exemplary damages. The court adopted the view of acts done with the intent to cause injury are “malicious.” That’s a very easy to understand test, and trade secret owners can use it to tell their story about how the defendant not only took valuable trade secrets, but knew what they were doing would harm the owner.
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