Theft of trade secrets and industrial espionage are of increasing concern to companies around the world, and litigation related to this issue can present distinctive challenges that require an experienced team of economists. The Brattle Group’s IP experts have worked on behalf of companies that have been injured by the theft of trade secrets to quantify profits lost by the plaintiff and evaluate the gains accrued to the defendant. We have also worked on behalf of defendants to determine the validity of theft claims and quantify damages. In all instances, our analyses combine a thorough review of the historical record with rigorous analysis of the economic value the secret delivers to each.
We were retained by the defendant, a diversified Fortune 100 manufacturing and financial services company, to offer testimony regarding damages in a theft of trade secrets case. The case involved allegations by a competitor that two of its former employees who had taken jobs with the defendant had brought with them a large volume of confidential documents—including business plans, marketing plans, strategy presentations, and customer correspondence—and that the defendant had used these materials in various ways that had injured the plaintiff. We testified that most of the materials in question were widely known outside of the plaintiff’s organization or were too dated to be of commercial value. We also showed that the allegedly misappropriated trade secrets had not caused the plaintiff to lose customers to the defendant. For cases in which the defendant had won business from the plaintiff’s customers, those wins had occurred prior to the alleged theft.
For a leading U.S. manufacturer of chemicals, adhesives, tape, and label products that had been the victim of a concerted program of industrial espionage by a foreign competitor, a current Brattle principal quantified the economic damages resulting from the theft of technology and trade secret information, offering testimony both in the sentencing hearing of the criminal case of a defendant executive convicted of economic espionage, and in the civil lawsuit filed by the U.S. company seeking redress for damages suffered as a result of the theft. The jury in the civil trial awarded $60 million in damages based on this testimony.
In this case, Brattle worked on behalf of a leading e-commerce firm that was engaged in a dispute with a major corporate shareholder. The shareholder had purchased the firm’s shares—ostensibly—to aid in the firm’s expansion but instead had allegedly gathered confidential data from the firm and used that data to set up a competing business. Brattle’s expert estimated damages arising from the corporate shareholder’s breached promise to assist the client with its international expansion. It also valued the client’s trade secrets using documentary evidence and transactional data to determine damages arising from this alleged theft of trade secrets. The case resolved with a favorable settlement for our client.
In connection with an intellectual property-related Section 337 dispute before the International Trade Commission, Brattle provided economic analysis and expert testimony on behalf of the Claimant, a major U.S. manufacturer of construction equipment. In the events leading up to this dispute, the Respondent—a Chinese manufacturer of construction equipment—hired a leading researcher employed by the Claimant, as well as a number of additional employees, who brought with them proprietary business and technical information belonging to the Claimant. The Respondent was charged with misappropriation of a number of patents and trade secrets. Brattle provided expert testimony on the existence of a threatened domestic industry, and on the nature and magnitude of the economic injury likely to result from the misappropriation. The Commission ruled in favor of the Respondent, issuing a cease-and-desist order against Claimant with respect to the asserted trade secrets for a period of 10 years.