The Unjust Enrichment Option: A Trade Secret Plaintiff's Choice of Remedy

A trade secret plaintiff’s willingness to license a secret does not limit recovery to a reasonable-royalty measure. Federal and state trade secret statutes provide multiple damages approaches, including actual-loss damages and unjust enrichment damages. The DTSA allows damages for actual loss caused by misappropriation and also allows damages for unjust enrichment not addressed in computing actual-loss damages. The DTSA further permits liability for a reasonable royalty for unauthorized disclosure or use. Michigan’s Uniform Trade Secrets Act provides parallel remedy language and authorizes unjust enrichment as a statutory right. The Federal Circuit reversed a lower court’s restriction on unjust enrichment recovery and reinstated a jury’s damages award after reducing it.

"A trade secret plaintiff's willingness to license its secret does not limit future recovery to a reasonable-royalty measure. In Versata Software, LLC v. Ford Motor Co., Nos. 2024-1140 (Fed. Cir. May 22, 2026), the court found that the plaintiff may still recover under alternative damages theories, such as the defendant's unjust enrichment."

"Our various trade secrecy statutes provide for both actual-loss damages and also for unjust state and federal trade secret statutes provide several alternative damages calculation approaches. The DTSA, for example allows for both: (I) damages for actual loss caused by the misappropriation of the trade secret; and (II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss."

"The statute goes on to state that one alternative form of damages may be "imposition of liability for a reasonable royalty for the misappropriator's unauthorized disclosure or use of the trade secret." 18 U.S.C. § 1836(b)(3)(B). Versata was litigated under the Michigan Uniform Trade Secrets Act, which provides parallel remedy language. Notably, both statutes authorize unjust enrichment recovery as a matter of statutory right."

"On appeal, the Federal Circuit found the lower court erred by preventing the unjust enrichment recovery. The court also reversed the district court's reduction of an $82.26 million breach-of-contract award down to $3 and reinstated the jury's number. Ford hired Versata (then Trilogy) to develop vehicle-configuration software, licensed two products under a 2004 Master Subscription and Services Agreement (MSSA), and then, when renewal talks broke down in 2014, released its own configuration software that Ford had developed while still licensing Versata's product."

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