Remedies, Damages, and Attorneys' Fees Under Maryland Law

• Jurisdiction: Maryland

V. REMEDIES, DAMAGES, AND ATTORNEYS' FEES UNDER MARYLAND LAW

A. Equitable Remedy—Injunction

Section 11-1202(a) of MUTSA and section 2(a) of UTSA allow for injunctive relief in the case of actual or threatened misappropriation.¹⁵⁹ A monetary award is often insufficient to redress harm to an owner of trade secrets caused by misappropriation, and this provision permits a court to consider the unique, immediate, and irreparable harm that an owner of a trade secret may incur as a result of misappropriation.

Maryland Rule 15-504 prescribes the standard for granting injunctive relief, which permits injunction only where facts demonstrated "by affidavit or other statement under oath that immediate, substantial, and irreparable harm will result to the person seeking the order before a full adversary hearing can be held on the propriety of a preliminary or final injunction."¹⁶⁰ There are four factors that must be considered by state trial courts in determining whether injunction should issue:

(1) the likelihood that the plaintiff will succeed on the merits; (2) the "balance of convenience" determined by whether greater injury would be done to the defendant by granting the injunction than would result from its refusal; (3) whether the plaintiff will suffer irreparable injury unless the injunction is granted; and (4) the public interest.¹⁶¹

Maryland Rules of Civil Procedure, 15-501-15-505, govern procedures for filing preliminary injunctions and temporary restraining orders in state court.

If the preliminary injunction is sought in federal court, the standard articulated in Real Truth About Obama, Inc. v. Fed. Election Comm'n, must be applied.¹⁶² That case invalidated a "balance of the hardships" approach that had been followed in the Fourth Circuit for years. Under the old approach, all four preliminary injunction factors were considered, but "each requirement [could] be conditionally redefined" in a "flexible interplay" depending on how the other requirements were met.¹⁶³Real Truth invalidated that approach in the Fourth Circuit. Now, a plaintiff applying for a preliminary injunction must satisfy each of the following requirements: (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his favor; and (4) an injunction is in the public interest.¹⁶⁴

B. Damages

A plaintiff may recover damages for misappropriation of its trade secrets through three different methodologies: (1) it may recover the actual loss caused by the misappropriation; (2) it may recover the unjust enrichment the misappropriation has afforded to the defendant (to the extent this amount is not also taken into account in computing the actual loss); or (3) it may recover a reasonable royalty for the defendant's unauthorized disclosure or use of the trade secret.¹⁶⁵ A failure to establish any of these three damages methodologies...