Posted by Sequel on October 29, 2013
Topic: blogs, Trade Secrets
Tags: Attorney Fees, Bad Faith
Bad Faith Applies to Continuing Baseless Suits, Court Rules

In the 47 states that have adopted The Uniform Trade Secrets Act, a plaintiff who files a lawsuit in bad faith for misappropriation of trade secrets can be ordered to pay the defendant’s attorney fees. Until recently, however, it wasn’t clear whether such a right extended to defendants against whom such a lawsuit was maintained after it is clear plaintiff cannot prevail.

The U.S. Court of Appeals for the Seventh Circuit recently ruled in Tradesman International, Inc. v. John Black, et al., ( that awarding attorney fees to defendants in such cases is called for by “common sense.” The court wrote: “[r]egardless of her intention at the time of filing, surely a plaintiff makes a claim in bad faith if she continues to pursue a lawsuit – even after it becomes clear that she has no chance to win the lawsuit – in order to cause harm to the defendant.”

It would appear, then, that plaintiffs pursuing a trade secrets case should reconsider the good-faith nature of their ongoing claims during discovery and trial to avoid paying the other side’s fees.

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