USA – D.C. METROPOLITAN AREA Trends and Developments Contributed by: Linda M. Jackson, Andrew Baskin, Pascal “Pat” Naples and John M. Hindley, ArentFox Schiff LLP
access to documents with proprietary information, and using firewalls. The Supreme Court of Virginia’s landmark decision in Appian Corp. v Pegasystems, Inc. , 924 S.E.2d 621 (Va. 2026) clarified several aspects of VUTSA. The case involved the reversal of a USD2 billion jury verdict where Pegasystems is alleged to have used a “spy” to access Appian’s internal website to gather confidential and proprietary information. The Court held that VUT - SA “applies to any information that meets the statutory definition, whether that be computer code, a market - ing plan, or even undisclosed and not publicly ascer - tainable strengths and weaknesses of a product”. To that end, the Court interpreted VUTSA’s definition of “trade secret” to broadly include “any information that provides actual or potential economic value to those who rightfully possess it and that is not ‘readily ascer - tainable’ through legitimate means by others ‘who can obtain economic value from... disclosure or use’ of the information, so long as the rightful possessor of the information has taken ‘reasonable’ steps under the circumstances to maintain the secrecy of the informa - tion”. It further confirmed that secrecy need not be absolute; trade secrets “can be disclosed to a million people and remain protected” so long as the disclo - sures are “made in confidence, express or implied”. It also held that by adopting a reasonableness standard, the state legislature “made clear that VUTSA requires neither bank vault nor armed-guard-style protection to maintain trade secret protection”. To obtain damages, the Court emphasised that complainants bear the bur - den of establishing a “causal connection” between the defendant’s wrongful conduct and the claimed dam - ages. Said differently, plaintiffs must show they were harmed and that the wrongful conduct proximately caused the harm. VUTSA defines “misappropriation” substantially in the same way as DCUTSA and MUTSA. Unlike DCUTSA and MUTSA, the Virginia statute defines “improper means” to include “use of a computer or computer network without authority”. Importantly, misappro - priation can still occur even where the defendant did not use improper means to acquire the trade secret if the defendant subsequently disclosed or used that secret in violation of a duty or without consent. Vari-
able Annuity Life Ins. Co. v Coreth , 535 F. Supp. 3d 488, 513 (E.D. Va. 2021). Spoliation often arises in trade secrets litigation. Virginia’s recently passed statute, Va. Code § 8.01- 379.2:1, addresses a party’s duty to preserve evi - dence and how courts should address spoliation. The statute provides that parties have a duty to preserve evidence that, based on the totality of the circum - stances, may be relevant to reasonably foreseeable litigation. If such evidence is lost due to a party’s fail - ure to take reasonable preservation steps and cannot be restored or replaced through additional discovery, a court may remedy the spoliation in two ways. First, upon finding prejudice to another party, the court may order measures no greater than necessary to cure the prejudice. Second, if the court finds that the spoliating party acted recklessly or intended to deprive another party of evidence, the court may presume that the evidence was unfavourable to the spoliating party, issue an adverse inference instruction, or dismiss the action or enter a default judgment. See Order, CACI, Inc.–Fed. v Schilling , No 2021-16925 (Va. Cir. Ct. Apr. 23, 2024) (unpublished) (granting default judgment against ex-employee who engaged in reckless and wilful spoliation, including repeatedly wiping devices subject to a court-ordered forensic examination). Like the DC and Maryland statutes, VUTSA author - ises “complainant[s]” to sue for misappropriation. Consistent with the statute, the Court in Appian Corp. discussed the definition of “trade secret” to broadly include any information that provides economic value “to those who rightfully possess it” and described how a trade secret “holder” must maintain secrecy. National Trends and Issues Concerning Trade Secrets and DTSA Claims Precision in defining a trade secret Courts are increasingly demanding precision in the identification of trade secrets. The Fourth Circuit in Sysco Machinery Corp. v DCS USA Corp. held that both DTSA and state trade secret statutes require a plaintiff to identify “with sufficient particularity” the trade secret it claims has been misappropriated. 143 F.4th 222, 228–29 (4th 2025). Failure to do so may lead to dismissal, like in JTH Tax LLC v Cortorreal ,where the court dismissed a DTSA claim because the plain -
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