The TriZetto Group, Inc., et al. v. Syntel Sterling Best Shores Mauritius Limited, et al.

The federal Defend Trade Secrets Act (“DTSA”) allows a trade-secret plaintiff to recover damages for both “actual loss … and … any unjust enrichment caused by the misappropriation” of a trade secret. 18 U.S.C. § 1836(b)(3)(B)(i)(I)-(II) (emphasis added). “Unjust enrichment” damages, unlike a plaintiff’s “actual loss” damages, are measured by the benefit the defendant receives from the misappropriation. Those damages commonly include any development costs the defendant avoided by misappropriating the trade secrets. But the Second Circuit created a split with the Third, Fifth, Sixth, Seventh, Ninth, and Eleventh Circuits by holding a plaintiff cannot recover a defendant’s avoided costs as a form of unjustenrichment damages absent proof that the plaintiff suffered “compensable harm beyond its lost profits,” such as a reduction in the value of the trade secret. The question presented is: Whether a plaintiff may seek avoided costs as a measure of unjust-enrichment damages if and only if the plaintiff has suffered a “compensable harm beyond its lost profits”—a novel limitation imposed by the Second Circuit that finds no support in the plain language of the DTSA or the common law.