The secret saved the defendant time and money. Measuring the theft means reconstructing the development path the defendant skipped.
Start a conversation with Cournot, the Institute’s damages concierge, already scoped to trade secret measures. Pick a starting point, or describe the dispute directly.
Trade secret law offers the widest damages menu in intellectual property: the plaintiff's actual loss, the defendant's unjust enrichment to the extent it is not already counted in that loss, and, where the governing law permits, a reasonable royalty. Beneath the familiar labels sit two concepts that exist nowhere else. Head start measures the value of arriving early: the defendant reached the market sooner than lawful independent development would have allowed, and the damages window is that saved interval, during which its sales, share or position were built on the misappropriation. Avoided cost measures what the defendant did not spend: the research, the failed experiments, the engineering time that the plaintiff's investment had already paid for. Both require the same reconstruction, of how long lawful development would have taken and what it would have cost, and that reconstruction is the case. It is part technical, what was actually secret and how hard it was to derive, and part economic, what the interval or the saving was worth. The two expert disciplines have to fit together, because an economist valuing a head start that the technical evidence cannot support is building on sand, and the defense will say so.
Every measure prices the same underlying thing: the shortcut the defendant took.
The plaintiff’s lost profits and other loss from the misappropriation. The standard machinery, with the usual counterfactual demands.
The defendant’s gain from use of the secret, with apportionment and cost deduction fights as in any gain-based measure.
The interval between when the defendant arrived and when lawful development would have delivered it. The window that damages run over.
What independent development would have cost, including the failures the plaintiff paid for and the defendant skipped.
Where permitted: what a license to use the secret would have commanded. Borrowing the patent machinery, with a different negotiation.
What was genuinely secret, and how long derivation would honestly take. The economic measures inherit whatever this analysis gets wrong.
How the Institute approaches a trade secret damages question.
Trade secret cases are won and lost on the reconstruction.
Every dollar in a head start claim depends on how long lawful development would have taken, and that estimate comes from technical evidence, not economic evidence. If the technical foundation moves by a year, the damages move with it. Build that testimony first, and build the economics on top of it.
It depends on the parties' relative positions, which is why the measures should be scoped in parallel before one is chosen. Where the plaintiff and defendant compete head to head, actual loss can be substantial and provable through the ordinary lost profits machinery. Where the defendant exploited the secret in markets the plaintiff never reached, unjust enrichment or avoided cost usually dominates, because the plaintiff's own loss is small or speculative while the defendant's benefit is concrete. Head start framing matters most where the technology would eventually have been developed lawfully anyway, since it honestly bounds the claim to the stolen interval rather than pretending the defendant could never have arrived. The candid version of each measure is also its most defensible version.
With technical evidence, ideally from several directions at once. What the plaintiff actually spent, in time and money, to develop the secret is the natural anchor, adjusted for what a competent independent team would have known and for the failures a second developer might avoid. The defendant's own conduct is often powerful evidence: internal estimates made before the misappropriation, the pace of its development after acquiring the secret, engineers' communications about difficulty. Industry benchmarks for comparable development complete the picture. The estimate should carry stated uncertainty, because false precision about a hypothetical R&D program is easy to attack, while a reasoned range grounded in three independent sources is hard to.
The full cost of arriving lawfully, which is more than an engineering budget. Independent development takes time, so the measure can include the cost of capital tied up over the development period and, under some framings, the value of reaching the market later. It includes the failures: real development programs pursue dead ends, and the plaintiff's spending on paths that did not work was part of the price of finding the one that did. Whether the defendant would have needed the same failures is a fair fight, and the honest analysis engages with it. What the measure must not include is cost the defendant would have incurred anyway, which is why the analysis separates what the secret provided from what the defendant independently possessed or licensed.
Only to the extent they compensate different things, and the governing statutes are explicit that enrichment counts to the extent it is not already taken into account in computing actual loss. The coherent combinations divide the world by sales or by period: the plaintiff's lost profit on sales it would have made itself, plus the defendant's gain on sales the plaintiff never could have captured, with the boundary drawn and defended. What draws the double-recovery objection is overlap, the same sale generating both a lost profit award and a disgorged profit. An expert who can state, in one sentence per component, which harm it compensates and why the components do not intersect has answered the structural attack before it is made. Whether a given combination is legally available is counsel's question.
Describe the secret and what the defendant did with it. The Institute will help you see which measures the facts could support.