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
tiff’s complaint listed categories of information without describing the material or how it derived economic value from it. No 2:23-cv-0355, 2024 WL 897605, at *6 (E.D. Va. Mar. 1, 2024). At the same time, courts have acknowledged that plaintiffs need not plead the content of the trade secrets themselves. See Trilogy Fed. LLC v CivitasDX LLC , No 24-cv-2713, 2025 WL 436850, at *4–5 (D.D.C. Feb. 2, 2025) (finding that descriptions of “detailed multi-step strategies” and “specific steps to be taken” in the context of gov - ernment-contracting proposals were sufficiently par - ticular). DTSA’s extraterritorial reach DTSA’s extraterritorial reach continues to develop. The statute can apply to foreign conduct only if the defendant is a US citizen or entity organised under US laws, or “an act in furtherance of the offense was committed in the United States”. 18 U.S.C. § 1837. In dmarcian, Inc. v dmarcian Europe BV , the Fourth Circuit confirmed this framework, finding that retriev - ing trade secrets from servers located in the United States and facilitating their use or disclosure within the foreign country satisfied the domestic-nexus require - ment. 60 F.4th 119, 141–42 (4th Cir. 2023). Courts have since applied this standard to both sustain and dismiss DTSA claims. In GTY Technology Holdings Inc. v Wonderware, Inc. , a court found the domestic nexus satisfied where former employees and a foreign defendant met in Chicago to conspire to take trade secret information. No 24 CV 9069, 2025 WL 1455762, at *8 (N.D. Ill. May 21, 2025). By contrast, in Whaleco Inc. v Shein Technology LLC , the court dismissed a DTSA claim where all the alleged misappropriation occurred in China and the plaintiff pleaded no facts showing any “act in furtherance” within the United States. No 23-3706, 2025 WL 2801861, at *16–17 (D.D.C. Sept. 30, 2025). Intensifying trade secrets litigation: more filings and higher verdicts Trade secret litigation intensified again in 2025, with outsized verdicts and consequential appellate guid - ance. Juries issued large damages awards, though many were subsequently reduced on appeal or post- trial. In Appian Corp. , which involved a jury award exceeding USD2 billion for trade secret misappro - priation under VUTSA, the Virginia Supreme Court
affirmed the Court of Appeals’ reversal and remanded for a new trial, addressing important questions about the proper burden of proof for damages. Other large jury awards include a USD452 million award in Insu- let Corp. v EOFlow (D. Mass) and USD70 million in TriZetto v Syntel Sterling (S.D.N.Y) . Such decisions illustrate both the high stakes and the volatility of trade secrets litigation. Spoliation Spoliation remains a recurring and critical issue in trade secret cases. Courts have shown increasing willingness to impose severe sanctions, including default judgment, for intentional, bad-faith spoliation. In Atlantic Diving Supply, Inc. v Komornik , the court imposed adverse inference sanctions after finding that the defendants had engaged in a pattern of destroy - ing evidence, including deleting communications and using encrypted messaging platforms to avoid detec - tion. 113 Va. Cir. 179, 187–94 (Va. Cir. 2024). Other courts have entered default judgment (also known as a “termination sanction”) for intentional spoliation where ex-employees wiped storage devices and laptops, concealed evidence, deleted data or emails, and vio - lated discovery-related orders. See BalanceCXI, Inc. v Int’l Consulting & Rsch. Grp., LLC , No 1:19-CV-0767- RP, 2020 WL 6886258, at *13–14 (W.D. Tex. Nov 24, 2020); WeRide Corp. v Huang , No 5:18-CV-07233- EJD, 2020 WL 1967209, at *11–16 (N.D. Cal. Apr. 24, 2020). Plaintiffs should retain forensic experts early, pursue expedited discovery, and document preser - vation failures to obtain redress for spoliation where appropriate. Emerging technology and AI issues Artificial intelligence is transforming components of trade secret jurisprudence. Emerging questions include the extent to which AI training or deploy - ment practices risk waiving trade secret protection if protective measures are not robust and ownership boundaries around compilations generated through joint development. Courts are beginning to address how AI-driven software platforms are identified and protected as trade secrets, with decisions emphasis - ing that a plaintiff must identify the specific technical contours of the trade secret, not merely describe what the software is intended to accomplish.
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