In his classic song The Gambler, Kenny Rogers famously advised: “You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run.” It’s good guidance for surviving a poker table, but also important to plaintiffs prosecuting trade secret claims. Understanding your evidence — or lack thereof — can mean the difference between winning or losing and having to pay your opponent’s attorneys’ fees.
In the recent case of All American Semiconductor LLC v. APX Technology Corp., a California appellate court affirmed a trial court’s award of $200,000 in attorneys’ fees against a plaintiff for prosecuting a trade secret case in bad faith. Though the case is not published, it is a good reminder that aggressively pursuing and maintaining trade secret claims based on speculation and suspicions, without strong evidence, can have serious consequences.
California’s Uniform Trade Secrets Act provides for attorneys’ fees when a plaintiff has brought a bad-faith trade secret claim. It states: “If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable attorney’s fees and costs to the prevailing party.” READ MORE →