Seventh Circuit Ruling Intensifies Circuit Split on Trade Secret Damages Interpretation

The recent decision by the Seventh Circuit Court in Motorola v. Hytera has highlighted a growing split among circuits over the calculation of trade secret damages, and specifically, the relevance of avoided-cost damages under the Defend Trade Secrets Act. This decision aligns with a Second Circuit standpoint, emphasizing restrictions on avoided-cost damages, yet seems to diverge from the Seventh Circuit’s own prior judgments. The Uniform Trade Secrets Act, adopted by most states, along with the federal statute, permits the recovery of damages for both actual loss and unjust enrichment. However, the variance in judicial interpretation, as spotlighted in this case, suggests a persisting ambiguity that could potentially necessitate eventual Supreme Court intervention. The Court has twice opted not to address this dispute, leaving legal analysts and industry professionals attentively reviewing its developments.