O’Melveny & Myers' Trade Secret Litigation Studies

The O'Melveny & Myers firm has published two detailed analyses of trade secret litigation.  The Federal Court analysis is here.  The State Court analysis is here.

Some of the key findings of the State Court analysis, which was published second, include:

• In the vast majority of trade secret cases, the alleged misappropriator was someone the trade secret owner knew. Specifically, the alleged misappropriator was an employee or a business partner 93% of the time in this state study.  That figure was comparable to that of the federal study, which showed the alleged misappropriator to be an employee or a business partner in 90% of cases.  One key difference between state and federal courts is that while 78% of state cases involved alleged employee misappropriators, only 53% of federal cases did.
• About half of all state appellate cases are heard in only five states: California (16%), Texas (11%), Ohio (10%), New York (6%), and Georgia (6%).
• State appellate courts affirmed trade secret decisions 68% of the time and reversed them 30%.
• Alleged misappropriators won more often than trade secret owners on appeal, winning 57% of the time and losing 41%.  Alleged misappropriators also have an advantage on appeal in terms of affirmance/reversal rates. Appellate courts reverse lower court decisions in favor of trade secret owners more often (58%) than they reverse lower court decisions in favor of alleged misappropriators (42%).