DTSA Trade-Secret Damages Must Be Apportioned When Only Some Alleged Secrets Are Proven

I. Introduction

In Trinseo Europe GmbH v. Kellogg Brown & Root, L.L.C.; Stephen Harper (5th Cir. Jan. 21, 2026), the Fifth Circuit reviewed a trade-secret verdict arising from the alleged commercialization of “Dow-type” polycarbonate (“PC”) manufacturing technology. After a jury found misappropriation under the Defend Trade Secrets Act (“DTSA”) and awarded more than $75 million across reasonable royalty and unjust enrichment theories, the district court granted judgment as a matter of law (“JMOL”) on damages—vacating the monetary awards—while leaving the liability findings intact and issuing a permanent injunction. Trinseo appealed the vacatur of damages (and other rulings); defendants challenged liability and other issues.

The appeal centered on a recurring modern trade-secret problem: where a plaintiff pleads multiple “trade secrets,” but the factfinder validates only some of them, can damages computed on an “all-secrets” theory stand without a reliable method to isolate value attributable to the subset actually proven? The Fifth Circuit answered “no,” explicitly aligning DTSA damages with patent-law apportionment principles and affirming the district court’s take-nothing judgment on damages.

II. Summary of the Opinion

  • Damages (DTSA): The court held that DTSA misappropriation damages must be tied to the value of the trade secrets actually proven and misappropriated. When multiple trade secrets are alleged and only a subset is found to be trade secrets and misappropriated, the plaintiff must provide evidence that either (1) apportions value per trade secret (or secret group), or (2) supplies a methodology enabling the jury to apportion. Because Trinseo’s expert assumed misappropriation of all ten alleged secrets and provided no way to value only the four secrets the jury found, the monetary awards could not stand.
  • Liability (DTSA): The court affirmed denial of JMOL on liability, finding sufficient evidence that four items qualified as trade secrets and that KBR misappropriated them.
  • Limitations (DTSA): The court affirmed the jury’s rejection of the Harper Defendants’ limitations defense, holding that evidence supported the finding Trinseo did not discover, and should not have discovered through reasonable diligence, the actionable “misappropriation” before the relevant statutory cut-off.
  • TUTSA preemption: The court affirmed summary judgment that Trinseo’s alternative “confidential information” misappropriation claims were preempted by the Texas Uniform Trade Secrets Act (“TUTSA”) because they duplicated the trade-secret theory and, as pleaded, fell within TUTSA’s definition of “trade secret.”
  • Injunction: The court affirmed a permanent injunction against further use of Trinseo’s trade secrets, applying eBay Inc. v. MercExchange, L.L.C..

III. Analysis

A. Precedents Cited

1. Fifth Circuit trade-secret damages and the “patent analogy”

The court’s central doctrinal move was to convert a long-acknowledged “analogy” into an explicit apportionment requirement in multi-secret cases.

  • Univ. Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518 (5th Cir. 1974): The opinion treated University Computing as controlling backdrop for DTSA damages methodology. Quoting Int'l Indus., Inc. v. Warren Petroleum Corp., 248 F.2d 696 (3d Cir. 1957), University Computing states the proper measure of trade-secret damages is determined by reference to patent cases. The panel emphasized language in University Computing requiring an “apportionment of profits” and an “apportioned amount” corresponding to the trade secret’s “actual contribution” to the defendant’s success—phrasing the court read as consistent with modern patent apportionment.
  • Metallurgical Indus. Inc. v. Fourtek, Inc., 790 F.2d 1195 (5th Cir. 1986): Used for the constraint that even with flexibility in modeling trade-secret damages, awards cannot rest on “sheer speculation.”

2. Patent-law apportionment principles imported into trade-secret damages

  • Garretson v. Clark, 111 U.S. 120 (1884): Cited for the classic rule that a claimant must “separate or apportion” damages between the protected feature and unprotected features.
  • Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018): Cited for the proposition that apportionment is required when the accused technology does not make up the entirety of the accused product.
  • Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201 (Fed. Cir. 2014): Quoted (via Finjan) for the limiting principle that damages must reflect the value attributable to the infringing features “and no more.”
  • LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51 (Fed. Cir. 2012): Referenced as the articulation of the “entire market value” concept (discussed but held waived here).

3. Trade-secret cases vacating awards for failure to apportion among multiple alleged secrets

The panel relied heavily on decisions holding that “bundled” damages fail when the factfinder validates fewer than all claimed secrets.

  • Tex. Advanced Optoelectronic Sols., Inc. v. Renesas Elecs. Am., Inc., 895 F.3d 1304 (Fed. Cir. 2018) [hereinafter TAOS]: The court found TAOS persuasive because the plaintiff’s profits/disgorgement model assigned all profits to misappropriation of all alleged trade secrets. When only one trade secret remained as a liability ground, there was “no basis” to sustain the entire award. This mirrors the posture in Trinseo: only four of ten alleged secrets were found to be trade secrets, yet damages were modeled as if all ten were misappropriated.
  • O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 399 F. Supp. 2d 1064 (N.D. Cal. 2005), aff'd, 221 F. App'x 996 (Fed. Cir. 2007): Cited as an analogous bundled-damages failure: the expert assumed misappropriation of all asserted secrets and gave the jury no reasonable basis to apportion after it rejected some secrets. The Fifth Circuit treated O2 Micro as consistent with University Computing and commonsense causation: damages must track wrongful conduct actually found.

4. Authorities distinguishing when apportionment is satisfied

  • Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., 53 F.4th 368 (6th Cir. 2022): Trinseo invoked Caudill to argue a more permissive approach. The Fifth Circuit distinguished it: there the expert gave “options” enabling the jury to value one trade secret even while rejecting others. Trinseo’s expert did not.
  • Bishop v. Miller, 412 S.W.3d 758 (Tex. App.—Houston [14th Dist.] 2013, no pet.): Trinseo cited Bishop for flexibility. The court distinguished it because the jury in Bishop was asked about a compilation trade secret; Trinseo did not submit a compilation theory to its jury.
  • EchoSpan, Inc. v. Medallia, Inc., No. 24-4751, 2025 WL 3046753 (9th Cir. Oct. 31, 2025) (unpublished): The court treated EchoSpan as inapposite on the facts. There, evidence in lay terms allowed jurors to infer which secret drove value; here, highly technical secrets and conflicting “core” testimony did not supply a workable valuation basis.

5. Waiver/forfeiture guardrails shaping what the court would consider

  • Rollins v. Home Depot USA, 8 F.4th 393 (5th Cir. 2021) and Essinger v. Liberty Mut. Fire Ins. Co., 534 F.3d 450 (5th Cir. 2008): Used to reject Trinseo’s “built-in apportionment” theory as forfeited because it was not raised in the district court.
  • XL Specialty Ins. Co. v. Kiewit Offshore Servs., Ltd., 513 F.3d 146 (5th Cir. 2008): Used to refuse review of the entire-market-value argument because Trinseo did not challenge the district court’s finding that it waived the issue by opposing the relevant jury instruction and not requesting its own.

6. DTSA trade-secret status and misappropriation standards

  • Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir. 1991) and Reingold v. Swiftships, Inc., 126 F.3d 645 (5th Cir. 1997): Cited to explain that secrecy is relative; information can remain a trade secret even if known to several people, so long as it is not generally known and would be costly/time-consuming to duplicate by proper means.

7. Limitations and diligence

  • Margolies v. Deason, 464 F.3d 547 (5th Cir. 2006): Cited for the proposition that reasonable diligence is a fact question for the jury.
  • Aspen Tech., Inc. v. M3 Tech., Inc., 569 F. App'x 259 (5th Cir. 2014) and Pressure Sys. Int'l, Inc. v. Sw. Rsch. Inst., 350 S.W.3d 212 (Tex. App.—San Antonio 2011, pet. denied): Cited to clarify that employees leaving to compete is not “wrongful in and of itself,” informing why mere notice of consulting did not necessarily trigger accrual.

8. TUTSA preemption and Erie methodology

  • Brand Servs., L.L.C. v. Irex Corp., 909 F.3d 151 (5th Cir. 2018) and Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), as well as In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007): Used to frame the “Erie guess” approach: look to statutory text and intermediate state courts.
  • Reynolds v. Sanchez Oil & Gas Corp., 2023 WL 8262764 (Tex. App.—Houston [1st Dist.] Nov. 30, 2023, no pet.); Super Starr Int'l, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829 (Tex. App.—Corpus Christi-Edinburg 2017, no pet.); Title Source, Inc. v. HouseCanary, Inc., 612 S.W.3d 517 (Tex. App.—San Antonio 2020, pet. denied); Coe v. DNOW LP, 718 S.W.3d 338 (Tex. App.—Houston [14th Dist.] 2025, pet. filed): Cited to show Texas intermediate courts consistently apply a “gravamen” test—claims duplicating trade-secret misappropriation are preempted even if relabeled.
  • Pitts v. Rivas, 709 S.W.3d 517 (Tex. 2025): Quoted (via Coe) for the principle that courts should not reward “artful pleading.”

9. Injunction standards

  • eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006): Governing four-factor test for permanent injunctions.
  • Heil Trailer Int'l Co. v. Kula, 542 F. App'x 329 (5th Cir. 2013) (unpublished): Cited for the proposition (under Texas law) that the threat of trade-secret disclosure can constitute irreparable injury.
  • Boire v. Pilot Freight Carriers, Inc., 515 F.2d 1185 (5th Cir. 1975): Cited to show delay is a factor but not determinative against injunctive relief.
  • Texas v. United States, 809 F.3d 134 (5th Cir. 2015) and Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700 (3d Cir. 2004): Used for the balance-of-hardships notion that a wrongdoer cannot credibly complain about hardships it brought upon itself.

B. Legal Reasoning

1. The new operational rule: apportionment is required in multi-secret cases

The court’s most consequential holding is its explicit requirement that DTSA damages be supported by evidence enabling the jury to allocate value to the trade secrets actually found to exist and to have been misappropriated. The rule is framed as a straightforward application of (i) DTSA’s damages being “caused by” misappropriation, and (ii) the Fifth Circuit’s long reliance on patent damages as the “analogous line of cases” for trade-secret valuation (Univ. Computing Co. v. Lykes-Youngstown Corp.).

The court rejected Trinseo’s attempt to preserve an “all-or-nothing” damages model after the jury validated only four of ten alleged secrets. It reasoned that if damages are calculated on the assumption that ten secrets were taken, and the verdict establishes only four were, the jury has no non-speculative basis to determine what portion of the model corresponds to the four—particularly in a “highly technical” setting.

2. What plaintiffs must do (and what Trinseo did not)

The court affirmed the district court’s formulation: to avoid total failure when fewer than all alleged secrets are proven, a plaintiff must provide:

  • either evidence that apportions value per trade secret (or group of secrets),
  • or evidence providing a methodology or guidance for how the jury can apportion on a subset.

Trinseo’s expert, Thomas Pastore, did neither. His reasonable royalty and unjust enrichment opinions assumed misappropriation of all ten alleged secrets, did not value the secrets individually or in combinations, and offered no jury-usable framework for a four-of-ten outcome. The court treated that gap as “fatal” once the jury’s liability findings narrowed the secret set.

3. The court’s handling of “entire market value,” “built-in apportionment,” and “core” arguments

  • Built-in apportionment: The court refused to entertain it because Trinseo conceded it did not raise the theory below, invoking Rollins v. Home Depot USA.
  • Entire market value: The court treated the issue as waived based on Trinseo’s litigation choices at the jury charge stage and its failure to challenge the district court’s waiver ruling on appeal (XL Specialty Ins. Co. v. Kiewit Offshore Servs., Ltd.).
  • “Heart/core/value driver”: The court viewed this as substantively indistinguishable from an entire-market-value-style argument and rejected it factually: Trinseo’s own testimony identified multiple different elements (some not found to be trade secrets) as “core,” and Pastore admitted he offered no opinion enabling the jury to price a “share” of value if fewer than all ten were found misappropriated.

4. Why liability survived despite damages failing

The court separated sufficiency of evidence on DTSA liability from sufficiency on damages. On trade-secret status, it held a jury could find “reasonable measures” to protect secrecy and “independent economic value” under DTSA. On “generally known,” the court emphasized Taco Cabana Int'l, Inc. v. Two Pesos, Inc.: secrecy can persist even if some people know, so long as the information is not generally known and retains economic value; the fact that misappropriators had circulated the information did not automatically defeat secrecy.

On misappropriation, the court relied on the DTSA’s statutory definition and the evidentiary record allowing reasonable inferences that KBR acquired and/or used the four trade secrets found (Process Control Strategy; Phosgene Reactor; Oligomerization Reactor; Steam Devolatilization Process).

5. Limitations: “misappropriation” discovery is a fact-driven inquiry

The defendants argued that limitations began when Trinseo had notice of misappropriation “in general,” regardless of who did it. The court analyzed DTSA’s limitations language (“misappropriation … is discovered”) together with DTSA’s definition of “misappropriation,” which is actor-centered (“acquisition … by a person…”; “disclosure or use … by a person who…”). Applying that framing, the court held evidence supported the jury’s conclusion that earlier red flags (the SRI report; rumors; a consulting comment at a plant closure) did not compel, as a matter of law, discovery of the actionable misappropriation “with respect to which the action would relate.”

6. TUTSA preemption: alternative “confidential information” pleading will not avoid displacement

The court made an Erie-based prediction guided by Texas intermediate authority. It adopted the “gravamen duplicates TUTSA” approach reflected in Reynolds v. Sanchez Oil & Gas Corp., Super Starr Int'l, LLC v. Fresh Tex Produce, LLC, Title Source, Inc. v. HouseCanary, Inc., and Coe v. DNOW LP. Because Trinseo’s confidential-information claims relied on the same facts and were pleaded in terms mirroring the statutory trade-secret definition (reasonable secrecy measures; economic value from secrecy), they were preempted.

7. Injunction despite zero damages

Applying eBay Inc. v. MercExchange, L.L.C., the court affirmed the permanent injunction, stressing ongoing threatened use and disclosure, inadequacy of purely monetary remedies to address future harm, balance-of-hardships principles (Texas v. United States), and public interest in deterring trade-secret misappropriation (Aspen Tech., Inc. v. M3 Tech., Inc. cited by the panel on public policy).

C. Impact

  • For DTSA plaintiffs in the Fifth Circuit: The opinion materially raises the evidentiary discipline required for damages when multiple trade secrets are alleged. Plaintiffs cannot safely “bundle” royalties or unjust enrichment across a portfolio of alleged secrets without contingency valuation for partial wins. This affects expert design, jury instructions, verdict form strategy, and settlement leverage.
  • For defendants: The decision provides a clear post-verdict JMOL pathway: if the verdict narrows the secret set and the plaintiff’s model does not permit attribution to that set, damages can be vacated entirely—even when liability stands.
  • For trade-secret pleading and case management: Parties may litigate more aggressively over (i) grouping/“compilation” theories, (ii) verdict form granularity, and (iii) early expert disclosures showing how damages would be recalculated if only some secrets are proven.
  • For Texas-law companion claims: The TUTSA holding reinforces that alternative common-law “confidential information” claims are precarious when they duplicate the trade-secret factual nucleus and are pleaded in trade-secret terms.

IV. Complex Concepts Simplified

  • Apportionment: A damages principle requiring the plaintiff to isolate the value caused by the wrongful use of the protected information, rather than attributing the entire value of a product or business outcome to it. In a multi-secret case, apportionment often means valuing each secret (or secret cluster), or giving the jury a method to do so if only some secrets are proven.
  • Reasonable royalty (DTSA): A court-imposed license fee reflecting what the parties hypothetically would have agreed to for the unauthorized use or disclosure of the trade secret (18 U.S.C. § 1836(b)(3)(B)(ii)).
  • Unjust enrichment (DTSA): Disgorgement-type damages capturing benefits the defendant obtained by misappropriation that are not already accounted for in “actual loss” (18 U.S.C. § 1836(b)(3)(B)(i)).
  • Entire market value (as referenced): A narrow patent damages concept allowing damages measured on a whole product only when the protected feature drives demand for the entire product. Here, the court did not reach it due to waiver.
  • JMOL (Rule 50(b)): A post-verdict ruling setting aside a jury’s finding when no reasonable jury had a legally sufficient evidentiary basis for it. In this case, liability survived but damages failed because the evidentiary basis for “amount” was legally insufficient once the verdict narrowed the secret set.
  • TUTSA preemption: TUTSA displaces overlapping civil-law remedies for misappropriation of trade secrets. Texas courts look to the “gravamen” of the claim: if it duplicates the trade-secret misappropriation nucleus, relabeling it as “confidential information” will not preserve it.
  • Permanent injunction (eBay test): A plaintiff must prove irreparable injury, inadequacy of legal remedies, balance of hardships favoring equity, and consistency with the public interest.

V. Conclusion

Trinseo v. Harper/KBR cements a practical damages rule for DTSA cases in the Fifth Circuit: when a plaintiff alleges multiple trade secrets and wins on fewer than all, damages cannot rest on a bundled model that presumes misappropriation of the entire set. The jury must be given a reasonable, non-speculative basis to value the secrets actually found—through per-secret valuation, grouping, or a workable apportionment methodology. The decision simultaneously reinforces Texas’s trend toward robust TUTSA preemption of duplicative confidential-information claims and confirms that injunctive relief may remain appropriate even when monetary damages collapse for failure of proof on apportionment.