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Do three important decisions signal a trend? Well, they just might, particularly when they are considered with recent appellate decisions setting aside other runaway trade secret verdicts. Last month, the Virginia Supreme Court affirmed the Virginia Court of Appeals’ reversal of Appian Software’s $2 billion verdict against its competitor Pegasystems, agreeing that the trial court failed to properly instruct the jury on the burden of proof for Appian’s unjust enrichment damages. This followed the December 8, 2025 decision by the U.S. Court of Appeals for the Federal Circuit affirming U.S. District Court Judge Sandra Lioi’s vacatur of a $63 million jury verdict against The Goodyear Tire & Rubber Company because the plaintiffs failed to sufficiently identify several of their trade secrets. And most recently, on January 21, 2026, the U.S. Court of Appeals for the Fifth Circuit affirmed U.S. District Court Judge Andrew Hanen’s decision to vacate a $75 million jury verdict because the plaintiff Trinseo Europe elected not to apportion the damages for each of its trade secrets.

As I discuss below, those decisions are consistent with a growing number of other appellate and trial decisions critically examining the grounds giving rise to these mega-verdicts. So what is going on here? Read on to find out.

How did we get here? As I wrote in late 2022, the number of enormous verdicts in trade secret cases seemed to be growing. At the same time, other commentators and I had noted a shift in the manner in which many high profile trade secret cases were being litigated. Under the “old regime” of trade secret cases, the trade secret plaintiff, frequently an employer, brought its trade secret case against a former employee who was accused of taking the information to a competitor. In these cases, the employer generally sought an injunction in state court, relying on that state’s version of the Uniform Trade Secrets Act (UTSA). This approach made sense because (1) the employee was thought to be the greatest risk to an employer’s trade secrets and (2) he/she rarely had assets to satisfy a money judgment. As a result, this was the dominant template for trade secret litigation.

However, after the enactment of the Defend Trade Secrets Act (DTSA) in 2016, a “new regime” of trade secret litigation began to emerge. Under this new regime, instead of pursuing an injunction, a trade secret owner sought damages against a customer, large competitor or other business in federal court, relying on the DTSA. There were multiple reasons for this approach. For example, this type of misappropriation might be more difficult to detect because it did not neatly dovetail with the departure of an employee. Consequently, the passage of time after discovery of this type of misappropriation frequently meant that remedies like a TRO or preliminary injunction were ineffective. Deeper pockets also meant bigger damages. For these and other reasons, these trade secret disputes began to resemble the manner in which patent infringement cases were litigated.

Because the claims were for money damages, that also meant these trade secret trials often would be before juries. Trial lawyers have long believed that jurors would be especially receptive to plaintiffs’ claims in these cases. Indeed, the expert consulting firm Stout found that trade secret plaintiffs had an 84% “win rate” in jury trials from 2017 through 2022. And since virtually all trade secret cases involve some degree of intentional misconduct, many juries have had little difficulty finding that the misconduct is malicious, which in turn has triggered exemplary and punitive damages.

To illustrate, here are some of the larger trade secret verdicts since 2020:

  • $2 billion in Appian Software v. Pegasystems (2022);
  • $855 million in Syntel Sterling Best Shores Mauritius Ltd. v. The TriZetto Group Inc. (2023);
  • $756 million in Motorola Solutions, Inc. v. Hytera Communications Corp., Ltd. (2020);
  • $605 million in Propel Fuels v. Phillips 66 (2024);
  • $452 million in Insulet Corp. v. EOFlow Co. Ltd. (2024);
  • $222 million in Zest Labs Inc. v. Walmart, Inc. (2025);
  • $105 million in Versata v. Ford Motor (2022);
  • $95.7 million in Prsymian Cable & Sys. USA, LLC v. Syzmanski (2025);
  • $75 million in Trinseo Europe GmbH v. Kellog Brown & Root (2024);
  • $65 million in CODA Development v. Goodyear Rubber & Tire (2022).

But federal district courts and appellate courts have been less receptive. Here is a list of the above verdicts that have not survived post-trial motions or appeal:

  • $2 billion against Appian Software v. PegaSystems – set aside in 2024, affirmed in 2026;
  • $855 million in Syntel Sterling Best Shores Mauritius Ltd. v. The TriZetto Group Inc. – set aside by the Second Circuit in 2023;
  • $452 million in Insulet Corp. v. EOFlow Co. Ltd. – reduced to $49 million in 2025 to avoid a double recovery;
  • $105 million in Versata v. Ford Motor – set aside by trial court in 2023 (currently on appeal to the Sixth Circuit);
  • $75 million in Trinseo Europe GmbH v. Kellog Brown & Root – set aside by trial court in 2024 and affirmed by the Fifth Circuit in 2026;
  • $65 million against CODA Development v. Goodyear Rubber & Tire – set aside by trial court in 2023 and affirmed by the Federal Circuit in 2025.

So let’s take a look at the three recent decisions and then discuss how they might fit within the larger picture.

The Federal Circuit’s Decision in CODA v. Goodyear: The issue of whether CODA had adequately identified its trade secrets was a point of contention throughout this lawsuit. CODA accused Goodyear of misappropriating its self-inflating-tire technology under Ohio’s UTSA , during the course of a facility visit by Goodyear personnel. Goodyear contended that CODA failed to adequately identify those trade secrets, resulting in an order by Judge Lioi directing CODA to do so. But when Goodyear moved for summary judgment and a directed verdict on the grounds that CODA still had failed to sufficiently identify those trade secrets, Judge Lioi denied those motions. In September 2022, an Akron jury found that Goodyear had misappropriated those trade secrets and awarded $2.8 million in compensatory damages and a whopping $62.1 million in punitive damages.

After trial, however, Judge Lioi set aside the jury’s verdict. She found that CODA had failed to sufficiently identify a number of the trade secrets, that several of the alleged trade secrets could not qualify as trade secrets because they were not secret and/or because they were either not conveyed by CODA or taken by Goodyear.

On December 8, 2025, the Federal Circuit agreed and affirmed Judge Lioi’s reasoning. The Federal Circuit’s decision is highly fact-specific. It examined each of the contested trade secrets and the evidence presented for, and against, the status of each trade secret. As for the failure to identify with specificity, the Federal Circuit looked to CODA’s initial disclosures in discovery and found that for at least one (TS 24), CODA had attempted to belatedly introduce additional specificity through the testimony of its expert, which the Federal Circuit found showed that the requisite specificity was lacking. As for the others (TS 7, TS 11 and TS 20), the Federal Circuit found that the descriptions were lacking in the specific “design and development” information that would be expected for the disclosure of a trade secret; instead, the Court found that the descriptions were nothing but vague functional descriptions “with no detail regarding how those functions are carried out.”

The Virginia Supreme Court’s Decision in Appian v. Pegasystems: This has been one of the most highly anticipated rulings in recent memory, given the almost-apocalyptic damages awarded in this case. Not surprisingly, the facts in this case were egregious: Pegasystems hired a former Appian consultant as a “spy” and used him to educate its team about Appian’s otherwise unavailable features so that it could improve its competing platform. Appian pursued unjust enrichment damages and the Fairfax County jury obliged with a $2 billion verdict in the spring of 2022.

While Pegasystems raised a number of evidentiary issues on appeal, the most noteworthy dispute in this case arose from a jury instruction that Pegasystems claimed shifted the burden of proof on Appian’s unjust enrichment claim from Appian to Pegasystems. That instruction read as follows, with the controversial language highlighted:

For unjust enrichment, Appian is entitled to recover Pegasystems’ net profits. Appian has the burden of establishing by greater weight of the evidence Pegasystems’ sales; Pegasystems has the burden of establishing by greater weight of the evidence any portion of the sales not attributable to the trade secret or trade secrets and any expenses to be deducted in determining net profits.

The Virginia Court of Appeals reversed in the summer of 2024. That Court of Appeals found that this instruction could have been interpreted by the jury as permitting damages based on all of the defendant’s “sales,” regardless of whether they had any causal connection to trade secret misappropriation. In addition, the Court of Appeals found that the instruction shifted the burden of proof on damages–which is traditionally the burden of the plaintiff–to Pegasystems to show what sales were not attributed to the misappropriated trade secrets.

The Virginia Supreme Court affirmed the Virginia Court of Appeals’ reasoning on January 8, 2026. The Virginia Supreme Court emphasized that under common law, a plaintiff had long been required to provide proof of its damages. In the absence of a clear intention by the Virginia General Assembly to depart from that common law, Appian, as the plaintiff, still bore that burden under Virginia law. Further, examining the language of the Virginia UTSA, the Virginia Supreme Court found there was no language indicating an intention to depart from that rule and held the statute “strongly suggested” that a plaintiff still retained that burden of proof for its unjust enrichment damages.

The Fifth Circuit’s Decision in Trinseo Europe v. Kellog Brown & Root L.L.C.: This case was set aside because the plaintiff Trinseo elected not to apportion its damages for each of its trade secrets. Trinseo alleged that KBR and Trinseo’s former employees misappropriated 10 confidential polycarbonate production trade secrets for use in projects with Chinese firms.

Trinseo presented expert damage testimony premised on a misappropriation of all 10 of the trade secrets; in other words, the expert did not individually value each trade secret or any combination of the trade secrets, nor did he provide a method for the jury to do so. This “all-or-nothing approach” was tested when the jury found that only 4 of the 10 trade secrets were misappropriated. After trial, Judge Hanes found that Trinseo’s failure to apportion its trade secret damages, coupled with the jury’s failure to find liability on all of the trade secrets, was “fatal” to those damages and he vacated the $75 million verdict.

On January 21, 2026, the Fifth Circuit affirmed Judge Hane’s vacatur of Trinseo Europe’s damages. Drawing heavily on an analogous line of authority apportioning damages in patent cases, the Fifth Circuit emphasized the importance of separating out or apportioning a defendant’s profits that were attributable to the misappropriated trade secrets. The Fifth Circuit held that “trade secret damages–whether measured by a reasonable royalty or lost profits–must, like patent damages, ‘reflect the value attributable to the infringing features of the product, and no more.'”

Consistent with its earlier decision in Univ. Computing Co. v. Lykes-Youngstown Corp. and the Federal Circuit’s more recent decisions in Tex. Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc. and O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., the Fifth Circuit found that all of these cases “reflect the commonsense notion that trade secret damages must be tied to the defendant’s wrongful conduct–i.e., misappropriation.” Because Trinseo elected to bundle all of its trade secrets damages together, the Fifth Circuit held that the jury did not have a reasonable basis to award damages.

So What Does It All Mean? Are trade secret plaintiffs overplaying their hand at trial? Or is the law completely unsettled? Or is our jury system off the rails? Inquiring minds will have to wait until my next blog post to find out . . .