Source: www.stoelrivesworldofemployment.com
When asserting a claim for misappropriation, whether it be based on a civil claim, criminal charges or breach of contract, there are a few remedies available. The plaintiff can request injunctive relief, damages, and attorney's fees.
DAMAGES GENERALLY:
Fla. Stat. §688.004 permits a court to award monetary damages under the FUTSA and §775.083 allows for monetary penalties under the Criminal Theft Statute.
Source: www.unfaircompetitiontradesecretscounsel.com
MONETARY AWARDS UNDER THE FUTSA:
ACTUAL DAMAGES:
Under Fla. Stat. §688.004(1), a Plaintiff can attempt to collect actual monetary losses from the misappropriation of a trade secret.
§688.004 does not require that the limitation of secrecy from §688.003 similarly "limit a trade secret plaintiff's actual losses. Instead, section 688.004 requires causation between the actual losses and the misappropriation." Id. at 645.
"... a plaintiff's actual losses in a misappropriation of trade secrets case need only be "caused by" the misappropriation." Id. at 646.
Bangor Punta Operations, Inc. v. Universal Marine Co., 543 F.2d 1107 (5th Cir. Fla. 1976)
"it is not fatal to the recovery of substantial damages that he is unable to prove with definiteness the amount of profits he would have made or the amount of harm which the defendant has caused.It is only essential that he present such evidence as might reasonably be expected to be available under the circumstances." Id. at 1110
DEFENDANTS PROFITS:
Fla. Stat. §688.004(1) also allows a plaintiff to seek an award equal to the profits realized by the defendant due to the misappropriation of a trade secret.
Citing RRK Holding Co. v. Sears, Roebuck & Co., 563 F. Supp. 2d 832, 836 (N.D. Ill. 2008), the court agreed that "damages can include Plaintiff's actual loss caused by Defendant's misappropriation and the unjust enrichment caused by the misappropriation that is not taken into account in computing Plaintiff's actual loss." Id. at 645.
PUNITIVE DAMAGES:
Fla. Stat. §688.004(2) permits a court to award exemplary damages not exceeding an amount equal to twice the amount of plaintiff's actual damages.
If the cause of action is brought on or after October 1, 1999, then the exemplary damages are also limited by Fla. Stat. §768.73.
Perdue Farms v. Hook, 777 So. 2d 1047 (Fla. Dist. Ct. App. 2d Dist. 2001)
Quoting the Florida Supreme Court in Winn & Lovett Grocery Co. v. Archer, 126 Fla. 308, 171 So. 214, 221 (Fla. 1936), the court here stated "exemplary damages are given solely as a punishment where torts are committed with fraud, actual malice, or deliberate violence or oppression, or when the defendant acts willfully, or with such gross negligence as to indicate a wanton disregard of the rights of others." Id. at 1053.
ROYALTIES:
Fla. Stat. §688.004(1) also allows a court to impose a royalty.
Biodynamic Technologies, Inc. v. Chattanooga Corp., 658 F. Supp. 266 (S.D. Fla. 1987)
"Where the parties have agreed to the value of the trade secrets, either in a royalty agreement, a licensing contract, or an "agreement in principle," such that the damages will be subject to exact measurement, that course should be followed." Id. at 270.
Demit of Venezuela, C. A. v. Electronic Water Systems, Inc., 547 F. Supp. 850 (S.D. Fla. 1982)
"The Court ... finds that here it is more logical to fashion a remedy based on a fair assessment of the trade secret's benefit to the Defendant since his financial records provide an indication of the trade secret's value or at least its use. In doing so, the Court finds that the "reasonable royalty" standard ... provides the most fair and equitable method of assessing damages" Id. at 854.
MONETARY PENALTIES
Fla. Stat. §775.083 allows for a court to impose a fine if convicted of criminal trade secret misappropriation.
GENERALLY:
Injunctive relief could be sought as a remedy in two types of trade secret misappropriation actions: (1) under the FUTSA or (2) under a breach of contract claim.
Source: www.businesslitigationcolorado.com
INJUNCTIVE RELIEF UNDER FUTSA:
Fla. Stat. §688.003 permits injunctive relief as a remedy for actual or threatened trade secret misappropriation.
American Red Cross v. Palm Beach Blood Bank, 143 F.3d 1407 (11th Cir. Fla. 1998)
"In order to secure a preliminary injunction, a plaintiff must show (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction were not granted, (3) that the threatened injury to the plaintiff outweighs the harm an injunction may cause the defendant, and (4) that granting the injunction would not disserve the public interest." Id. at 1410.
"Rule 65(d) of the Federal Rules of Civil Procedure provides that "every order granting an injunction … shall be specific in terms; [and] shall describe in reasonable detail … the act or acts sought to be restrained…." Under this rule, "an ordinary person reading the court's order should be able to ascertain from the document itself exactly what conduct is proscribed." Id. at 1411.(citations omitted)
Hatfield v. AutoNation, Inc., 939 So. 2d 155 (Fla. Dist. Ct. App. 4th Dist. 2006)
"[Fla. Stat. §688.003] deals not with restrictive covenants and employment by a business' competition, but with misappropriation. It provides injunctive relief when trade secrets have actually been misappropriated, as here, or misappropriation has been threatened. An injunction with respect to stolen business secrets is authorized where it will eliminate commercial advantage derived from the misappropriation and affirmative acts to protect a trade secret can be compelled by court order." Id. at 157.
DURATION:
Fla. Stat. §688.003(1) also provides that an injunction can only last as long as the information remains secret.
NOTE: this section does not necessarily limit the potential damages.
"Section 688.004, Florida Statutes, does not require that this period be applied to limit a trade secret plaintiff's actual losses." Id. at 645.
I.C. Sys. v. Oliff, 824 So. 2d 286, 287 (Fla. Dist. Ct. App. 4th Dist. 2002)
"The violation of an enforceable restrictive covenant not only creates a presumption of irreparable injury, [FN4] if it involves misappropriation of trade secrets the legislature has expressly authorized the complainant to seek both injunctive relief and damages." Id. at 287.
ROYALTIES:
Fla. Stat. §688.003(2) permits a court, in "exceptional circumstances," to impose a royalty.
CREATIVE MEASURES PERMITTED:
Fla. Stat. §688.003(3) allows for a court, in its own discretion, to come up with other solutions for ensuring the protection of a trade secret.
INJUNCTIVE RELIEF UNDER A BREACH OF CONTRACT:
BEFORE JULY 1, 1996:
Under Fla. Stat. §542.33(2)(a) a breach of an enforceable restrictive covenant is all a Plaintiff must show to fulfill their burden of proof. This section also permits a court to refuse injunctive relief where it would be "contrary to the public health, safety, or welfare or in any case where the injunction enforces an unreasonable covenant not to compete or where there is no showing of irreparable injury."
ON OR AFTER JULY 1, 1996:
Under Fla. Stat. §543.335 a plaintiff must prove the existence of a legitimate business interest. §542.335(1)(c) also provides that a court may
Shields v. Paving Stone Co., 796 So. 2d 1267 (Fla. Dist. Ct. App. 4th Dist. 2001)
"If a contractually specified restraint is over-broad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest or interests." Id. at 1269.
Envtl. Servs. v. Carter, 9 So. 3d 1258 (Fla. Dist. Ct. App. 5th Dist. 2009)
Distinguished the facts here from those in Shields, because Shields involved an overly broad non-compete agreement, where ESI's non-compete agreement with its former employees was protecting ongoing business relationships. Id. at 1265-1266.
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ATTORNEY'S FEES UNDER THE FUTSA
Fla. Stat. §688.005 provides that the prevailing party may be awarded attorney's fees if:
Real-Time Lab., Inc. v. Predator Sys., 757 So. 2d 634 (Fla. Dist. Ct. App. 4th Dist. 2000)
"The statute gives the trial court discretion to award attorney's fees even if the actions of the misappropriating parties is found to be willful and malicious." Id. at 638.
ATTORNEY'S FEES UNDER THE CRCPA
Fla. Stat. §772.104 allows a defendant to be awarded attorneys fees if a plaintiff brings a claim that lacks factual or legal support.
ATTORNEY'S FEES FOR BREACH OF CONTRACT
Fla. Stat. §542.335(1)(k) allows for a court to award attorney's fees and costs to the prevailing party.
