The United States District Court for the W.D. of Pennsylvania has confirmed that, at least under Pennsylvania law, there is no standalone cause of action for attorney’s fees, expenses, and costs to be recovered in a separate lawsuit filed by the prevailing party in a previous trade secret misappropriation lawsuit.  Section 5305 of the Pennsylvania Uniform Trade Secrets Act (PUTSA), namely Section 5305, empowers a court may award reasonable attorney’s fees, expenses and costs to “the prevailing party” (1) if a claim of misappropriation is made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists. 12 Pa. Cons.Stat. § 5305.  However, the Court confirmed that the proper procedure for such an award is following either summary judgment or trial on the merits.  In doing so, the Court granted Defendants Motion to Dismiss the PUTSA count.

It is worth noting that this federal court lawsuit between rival carpet-cleaning companies followed a state court action and also relates to abuse of process, Lanham Act claims, unfair competition, and fraud (with the fraud claim also being dismissed).  Regardless, trade secret litigators regularly deal with claims for attorneys fees following a UTSA claim.  While it is within the Court’s discretion whether to award such fees, this case helps trade secret attorneys understand when and how to pursue such fees.

Peek v. Whittaker, 2:13-CV-OI188, 2014 WL 2154965 (W.D. Pa. May 22, 2014).

 

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