Unjust Enrichment, Injunctions, and Third-Party Access Under the DTSA:
A Comprehensive Commentary on Computer Sciences Corp. v. Tata Consultancy Services Ltd., No. 24‑10749 (5th Cir. Nov. 21, 2025)

I. Introduction

The Fifth Circuit’s decision in Computer Sciences Corp. v. Tata Consultancy Services Ltd. (“CSC v. TCS”) is a major trade secret and remedies decision under the federal Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1836 et seq. It arises out of a high‑stakes outsourcing and platform‑migration project in the insurance industry and squarely addresses:

How far a third‑party service provider can go in using a customer’s licensed software and documentation under a “third‑party access” addendum.
What “solely for the benefit of” means in that context.
What mens rea is required for DTSA liability and for “willful and malicious” conduct justifying exemplary damages.
When unjust enrichment damages (especially “avoided costs”) can be combined with, or must yield to, injunctive relief.
The constitutional limits on exemplary (punitive) damages under the DTSA.
The lawful scope of injunctions against non‑parties under Rule 65(d)(2).

On the facts, CSC (the software vendor) claimed TCS (a major IT services company) misused CSC’s Vantage and CyberLife source code and manuals—originally licensed to Transamerica, a mutual client—to win a $2.6 billion contract and develop TCS’s own BaNCS platform for the U.S. market. After a bench trial with an advisory jury, the district court found trade secret misappropriation under the DTSA, awarded over $56 million in unjust enrichment damages, doubled that as exemplary damages, and imposed a sweeping, long‑term injunction.

On appeal, the Fifth Circuit largely affirms on liability and damages but reshapes the remedial landscape. It:

Affirms that TCS’s use was unauthorized under the CSC–Transamerica “Third‑Party Addendum” and that TCS acted with the requisite knowledge and willfulness.
Declines to adopt a new DTSA‑specific “heightened specificity” standard for defining trade secrets, due to waiver.
Holds that unjust enrichment damages under the DTSA do not require separate “compensable harm” to the owner beyond the misappropriator’s gain, but cannot duplicate the effects of injunctive relief.
Vacates the injunction and remands with instructions:
- to remove the ban on TCS’s future use of the (cleansed) BaNCS platform (“Post‑Misappropriation BaNCS Material”), and
- to conform the definition of bound entities (“TCS Parties”) to Rule 65(d)(2).
Affirms the 2:1 ratio

The opinion therefore sets important precedent in three principal areas: (1) contractual limits on third‑party use of licensed software and documentation; (2) the structure and interaction of unjust enrichment and injunctive remedies under the DTSA; and (3) the permissible reach of DTSA injunctions over related non‑parties.

II. Summary of the Opinion

A. Parties and Background

CSC: An American multinational providing IT services and policy administration software (Vantage and CyberLife) to life and annuities insurers.
TCS: A global technology and consulting firm, with its own insurance platform, BaNCS.
Transamerica: A large insurer that licensed CSC’s platforms and later engaged TCS as an outsourcer and then as the vendor for a new core system (BaNCS).

CSC had long‑standing license agreements with Transamerica governing use of its Vantage and CyberLife systems, including a 2014 Third‑Party Access Addendum that allowed named consultants, including TCS, to work with CSC’s software “on behalf of and solely for the benefit of” Transamerica. Separately, Transamerica and TCS entered a series of master services and service agreements (2013, 2016–18) to maintain CSC’s systems and then transition to BaNCS.

During the bid and migration process, TCS allegedly used CSC’s source code and technical documentation to:

Prepare its bid and “target operating model” to displace CSC at Transamerica.
Short‑cut development of the U.S. version of BaNCS (particularly the “customer layer”).
Migrate (“convert”) Transamerica policies from CSC platforms to BaNCS.

An inadvertent email—forwarding CSC source code snippets and manuals to TCS’s BaNCS development team—triggered CSC’s lawsuit under the DTSA (plus other claims).

B. Procedural Posture and District Court Rulings

After an eight‑day trial with an advisory jury:

The advisory jury found CSC’s Vantage and CyberLife source code and manuals to be trade secrets; that TCS acquired them by improper means and used them without consent; and that TCS acted willfully and maliciously.
The district court adopted liability, but adjusted damages:
- $56,151,583 in unjust enrichment damages (avoided‑costs measure) under DTSA § 1836(b)(3)(B)(i)(II).
- $112,303,166 in exemplary damages (2x compensatory) under § 1836(b)(3)(C).
- A broad permanent injunction, which:
  - barred TCS from using CSC’s trade secrets or any “Post‑Misappropriation BaNCS Material” in the U.S. market;
  - restricted certain TCS employees from working on U.S. market software for 18 months; and
  - imposed long‑term monitoring and compliance provisions.

TCS appealed on six issues: contract authorization, mens rea, trade secret specificity, the coexistence of unjust enrichment and injunctive relief, excessiveness of exemplary damages, and the injunction’s reach to non‑parties.

C. Fifth Circuit Holdings in Brief

Contract Authorization: The Third‑Party Addendum did not authorize TCS to use CSC’s confidential information to prepare its bid, to build a competing BaNCS platform, or to conduct migration in the manner it did. The phrase “on behalf of and solely for the benefit of” Transamerica is read strictly.
Mens Rea and Willfulness:
- TCS knew or had reason to know its acquisition and use were unauthorized.
- Its misappropriation was willful and malicious under the parties’ agreed standard: “intentional misappropriation resulting from the conscious disregard of the rights of the owner of the trade secret.”
Specificity of Trade Secrets: The court declines to adopt a DTSA‑specific specificity standard because TCS did not properly raise that legal argument below and briefing was sparse. The district court’s reliance on GlobeRanger (a Texas state‑law case) stands for this case, but the Fifth Circuit leaves the DTSA standard open.
Unjust Enrichment and Injunction:
- The DTSA allows unjust enrichment damages (including avoided costs) without requiring separate “compensable harm” beyond the misappropriator’s gain.
- However, damages and injunctions cannot be duplicative. Here, the avoided‑costs award and the ban on using BaNCS overlapped in part.
- Remedy: Vacate the injunction and remand to:
  - remove the bar on TCS’s future use of “Post‑Misappropriation BaNCS Material”, and
  - maintain the prohibition on TCS’s use or possession of CSC’s trade secrets themselves.
Exemplary Damages:
- The 2:1 exemplary‑to‑compensatory ratio is within the DTSA’s express statutory cap.
Scope of Injunction / Non‑Parties:
- Rule 65(d)(2) governs who can be bound (parties, their officers/agents/servants/employees/attorneys, and others in “active concert or participation” with them).
- The district court’s definition of “TCS Parties” risked conflating those categories.
- Remedy: On remand, redefine “TCS Parties” to track Rule 65(d)(2) and specify that directors, affiliates, successors, and consultants are bound only if in active concert or participation.

III. Detailed Analysis

A. Factual and Contractual Context

1. The Licensing and Outsourcing Structure

The case involves a classic “three‑corner” arrangement:

CSC–Transamerica: Long‑term software license agreements for Vantage and CyberLife, governed by Texas law. CSC retains ownership; Transamerica may use and modify the software to support its own operations, but may not reverse engineer or build competing systems using CSC’s information.
CSC–Transamerica Third‑Party Addendum (2014): Allows named service providers (including TCS) to “access, copy, execute and use” CSC software “on behalf of and solely for the benefit of” Transamerica, and to make derivative works under the same constraints as Transamerica itself.
Transamerica–TCS Agreements (governed by New York law):
- 2013 Master Services Agreement: TCS maintains Vantage and CyberLife for Transamerica.
- 2017 “Service Agreement 75”: Enables TCS’s due diligence and bid preparation, requiring TCS to understand Transamerica’s operations, validate transition plans, and prepare detailed reports and models.
- 2018 Amended and Restated Master Services Agreement and related agreements: TCS will administer Transamerica’s U.S. life and annuity business using BaNCS, hire over 2,200 rebadged employees, and provide development, migration, and maintenance services.

A key structural feature: CSC never contracted directly with TCS. TCS’s claimed rights flow entirely from Transamerica’s licenses and the Third‑Party Addendum. This becomes central to the authorization analysis.

2. The “Customer Layer” of BaNCS

TCS describes BaNCS as having four layers (core, business, geography, and customer). The “customer layer” stores client‑specific modifications and is “forward‑compatible” with core updates. The dispute includes whether that layer is:

a TCS‑owned enhancement to BaNCS (under the Core Administration System License Agreement), or
Transamerica‑owned “developed software” and work product (under the 2018 Master Services Agreement).

The Fifth Circuit concludes TCS owns the customer layer as part of “Licensed Products”, though (as the court notes) this ownership debate does little to change the misappropriation analysis; it matters more for the scope of permissible use and the forward‑looking injunction.

B. Liability Under the DTSA

1. Contractual Authorization and “Misappropriation”

Under the DTSA, “misappropriation” includes acquisition or use of a trade secret with knowledge (or reason to know) that it was acquired by improper means or used without consent. 18 U.S.C. § 1839(5). “Improper means” includes breach or inducement of a duty to maintain secrecy. § 1839(6).

TCS’s core argument: its access to and use of CSC’s information was authorized by contract—specifically, the Third‑Party Addendum and its own contracts with Transamerica. The Fifth Circuit dismantles this in several steps.

a. “On behalf of and solely for the benefit of [Transamerica]”

The Third‑Party Addendum allows TCS to:

“access, copy, execute and use” CSC software “on behalf of and solely for the benefit of” Transamerica (Section 3(a)); and
“copy, change, modify, supplement, amend, and prepare Derivative Works” of CSC software “if and to the same extent permitted” in the underlying Vantage and CyberLife licenses, again “on behalf of and solely for the benefit of” Transamerica (Section 3(c)).

The court applies straightforward textual interpretation:

“Solely” means “to the exclusion of all else,” i.e., exclusively for Transamerica’s benefit and no one else’s (including TCS’s).
The district court’s clarification—allowing third parties to receive ordinary payment for services—does not dilute the exclusivity of the benefit as to the use of CSC’s information.

Thus, TCS can be compensated for maintenance and migration services, and can incidentally gain “experience” or “reputation”, but it cannot:

use CSC’s trade secrets to build its own competing platform (BaNCS), or
leverage CSC’s information to win other business—here, the very contract that displaces CSC itself.

The Fifth Circuit analogizes to an attorney granted access to a third‑party e‑discovery platform solely to serve a client; that authorization does not extend to copying the platform’s code to build a competitor. The Second Circuit’s comment in Syntel is quoted with approval:

“[I]t is fanciful to suggest that [a company] would authorize [a competitor] to use its trade secrets to compete for business without saying so.”

b. Limits from the Underlying CSC–Transamerica Licenses

Even more constraining, Section 3(c) of the Third‑Party Addendum ties TCS’s derivative‑work rights to whatever Transamerica itself can do under the Vantage and CyberLife agreements. Those licenses:

Allow Transamerica to process its own data and modify CSC software to support its own internal use.
Do not authorize using CSC trade secrets to:
- prepare a bid to replace CSC, or
- develop a competing policy administration system.

The Fifth Circuit affirms the district court’s finding that “CSC’s license agreements with Transamerica do not contain any provisions giving Transamerica or any of its vendors the right to use the Trade Secrets to build a competing policy system” and, accordingly, the Third‑Party Addendum does not convey such rights to TCS.

The court also emphasizes a key structural point: CSC never directly authorized TCS. Transamerica’s private agreements with TCS cannot create authorization as against CSC if Transamerica itself lacks that authority. Thus:

Transamerica’s contracts with TCS may inform TCS’s belief or knowledge (mens rea),
but they cannot override the objective limits of CSC’s license to Transamerica.

c. Ownership of BaNCS and the “Customer Layer”

TCS tried to argue that Transamerica, not TCS, owned the BaNCS customer layer, implying a broader Transamerica‑based justification for use. The Fifth Circuit disagrees:

The 2018 Master Services Agreement defines “Work Product” very broadly but excludes “TCS Owned Software” and its enhancements, which are separately governed by the Core Administration System License Agreement.
The Core Administration agreement states that “Licensed Products” (including BaNCS and its enhancements and derivative works) remain TCS property.
Witnesses, including TCS’s own high‑level executives and product heads, testified that TCS retains ownership of BaNCS and that the customer layer consists of modifications to BaNCS.
TCS retained the BaNCS source code (including the customer layer), whereas Transamerica generally receives only object code for Licensed Products—a classic indicator of vendor ownership.

The district court’s choice to credit TCS’s president and BaNCS delivery manager over its deputy general counsel is sustained under deferential clear‑error review.

Taken together, the Fifth Circuit’s contract analysis sends a clear signal: “solely for the benefit of” is to be read literally, and vendor–licensee–outsourcer structures do not silently authorize competitive use of a vendor’s trade secrets.

2. Knowledge, Imputed Knowledge, and Willful/Malicious Conduct

a. Knowledge or Reason to Know (Mens Rea for Misappropriation)

DTSA misappropriation requires that the defendant “knows or has reason to know” that the trade secret was improperly acquired or used without consent. The Fifth Circuit relies on several strands of evidence to affirm this element:

TCS’s own IP policies: Its Intellectual Property Rights Manual required securing licenses or authorization for third‑party IP prior to use. TCS never sought CSC’s authorization despite widespread internal use of CSC materials. This cuts against any claim of innocent or inadvertent use.
CSC’s warnings (2018 letters): CSC repeatedly notified Transamerica (and later copied TCS) that TCS’s receipt or use of CSC material would constitute trade secret misappropriation and that Transamerica could not license CSC’s IP to TCS for competitive development.
Transamerica’s cautions to TCS: Transamerica instructed TCS not to incorporate CSC’s proprietary information into BaNCS’s customer layer except as expressly permitted by contract or by CSC directly—neither of which applied.
Statements and actions of TCS personnel: Managers and directors with supervisory authority over the Transamerica project understood they could not use CSC human capital or IP for BaNCS. These employees’ knowledge is imputed to TCS under United States ex rel. Vavra v. KBR, which imputes knowledge where employees have significant managerial authority over the relevant activities.

The court rejects TCS’s reliance on:

Vague comfort language from Transamerica (e.g., that it felt “very confident” about proceeding), which the court finds non‑specific and not authoritative as to CSC’s rights.
Transamerica’s assertion to CSC that it was “in full compliance” with the Third‑Party Addendum—an assertion that cannot absolve TCS of knowledge when TCS itself failed to adhere to its internal IP procedures and directly benefitted from the use of CSC materials.

b. Willful and Malicious Misappropriation (Exemplary Damages Threshold)

The parties agreed below that “willfully and maliciously” under the DTSA means “intentional misappropriation resulting from the conscious disregard of the rights of the owner of the trade secret.” TCS tried on appeal to import a stricter “intent to cause injury or harm” standard from the Fourth Circuit’s Steves & Sons v. JELD‑WEN, but the Fifth Circuit rightly notes that Steves did not endorse that standard as law; it merely described a litigant’s preferred test.

The Fifth Circuit finds willful and malicious conduct based on:

Deliberate misuse of CSC source code and manuals, labeled “confidential information,” by TCS’s BaNCS team.
Misrepresentations to Transamerica that rebadged employees were not using third‑party IP to build BaNCS functionality.
Efforts to circumvent email filters (e.g., sending “snapshots” of source code when attachments failed).
TCS’s refusal to engage CSC directly despite CSC’s repeated complaints and TCS’s knowledge that CSC was objecting to the very conduct at issue.

These findings comfortably satisfy the agreed “conscious disregard” standard and support exemplary damages.

3. Specificity of the Trade Secrets

TCS also argued that CSC failed to define its trade secrets with sufficient specificity. The district court applied the Fifth Circuit’s earlier GlobeRanger decision (a Texas‑law case) and found CSC’s definitions adequate.

On appeal, TCS pivoted, contending for the first time that:

GlobeRanger is not controlling in DTSA cases, and
other circuits impose a stricter specificity requirement under the DTSA.

The Fifth Circuit declines to entertain this new, purely legal argument:

Arguments not raised below are generally waived on appeal unless necessary to prevent a miscarriage of justice (Greenberg v. Crossroads).
DTSA‑specific specificity is a matter of first impression in the Fifth Circuit; the parties’ briefing was too sparse to warrant setting a standard in this case, especially where TCS had waived the issue.

Result: The court leaves in place the district court’s reliance on GlobeRanger and CSC’s trade secret definitions for this case, but intentionally does not set a DTSA‑specific standard. This is an important signal: the question remains open in the Fifth Circuit.

C. Remedies and Their Interplay Under the DTSA

1. Unjust Enrichment, Avoided Costs, and the Injunction

a. The Statutory Framework

Under DTSA § 1836(b)(3)(B), a prevailing trade secret owner may recover:

“damages for actual loss” caused by the misappropriation; and
“damages for any unjust enrichment caused by the misappropriation … that is not addressed in computing damages for actual loss.”

Here, CSC sought only unjust enrichment, not “actual loss,” and its expert presented two measures:

Cost/avoided‑cost approach: How much R&D expense TCS avoided by using CSC’s trade secrets in developing and deploying BaNCS (about $56.15m).
Income approach: Profits TCS expected or realized from the misappropriation (about $55.48m).

The court selected the higher avoided‑costs figure.

b. TCS’s Reliance on Syntel and the “Compensable Harm” Debate

TCS invoked the Second Circuit’s 2023 decision in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Group, Inc., which vacated a large avoided‑costs award under the DTSA. Syntel reasoned, among other things, that:

Unjust enrichment under the DTSA is meant to make the trade secret holder “whole”, especially where the secret’s value has been damaged or destroyed.
In that case, TriZetto’s “actual loss” calculation (lost profits on a single misused upgrade project) already captured Syntel’s unjust gain, and a permanent injunction prevented Syntel from realizing any further benefits from avoided R&D costs.
Therefore, awarding avoided‑costs damages would give a windfall.

Syntel contains broader language suggesting that avoided‑cost unjust enrichment may be unavailable where the plaintiff suffers “no compensable harm beyond its lost profits or profit opportunities.” TCS pressed that logic: CSC retained its secrets, did not prove diminished value or lost profits, and obtained an injunction preventing future use—so avoided‑cost damages were improper.

c. The Fifth Circuit’s Response: Unjust Enrichment Does Not Require Separate “Compensable Harm”

The Fifth Circuit draws an important line:

It agrees that double recovery is impermissible and that unjust enrichment cannot duplicate either actual‑loss damages or the effects of an injunction.
But it rejects any reading of the DTSA that adds a separate requirement that the trade secret owner show additional “compensable harm” beyond the defendant’s gain.

Instead, the court grounds unjust enrichment in its traditional restitutionary roots:

Unjust enrichment focuses on the benefit to the defendant, not necessarily on demonstrable monetary loss to the plaintiff.
Under the Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a, liability can exist even where the plaintiff cannot show a corresponding dollar loss; the key is that the defendant retains a benefit “in violation of the other’s legally protected rights.”
Section 42 cmt. f confirms that minimum restitution is the value of what was wrongfully taken, “whether or not the taking causes measurable harm to the claimant.”

The Fifth Circuit ties this to its own pre‑DTSA trade secret jurisprudence:

University Computing v. Lykes‑Youngstown Corp. (5th Cir. 1974): Where the secret is not destroyed and the plaintiff cannot prove specific injury, the “value of the secret to the defendant” (including saved development costs) is an accepted measure.
Bohnsack v. Varco (5th Cir. 2012): Recognizes a “flexible” damages approach, including development costs avoided by misappropriation.

Thus, as a matter of Fifth Circuit DTSA law:

Unjust enrichment damages can be awarded purely on the misappropriator’s gain, even if the trade secret owner cannot show separate monetary loss—provided that gain is not already reflected in “actual loss” damages or neutralized by an injunction.

d. The Real Issue: Overlap with Injunctive Relief

The Fifth Circuit reframes the question: not “did CSC suffer compensable harm beyond lost profits?” but “do the unjust enrichment damages and the injunction cover the same benefit?”

Conceptually:

If TCS misappropriates CSC’s trade secrets, thereby saving $56m in R&D, and then continues to use those ill‑gotten advances, it is unjustly enriched by $56m unless it pays that amount.
If TCS is forced to pay $56m (avoided costs) but is still allowed to use its resulting BaNCS platform going forward, it is simply restored to the position it would have occupied had it lawfully paid for development in the first place—no windfall to CSC or TCS.
By contrast, if TCS both:
- pays $56m in avoided‑costs damages, and
- is enjoined from using BaNCS at all,
TCS pays as if it funded development, but it is denied the ability to use what it has, in effect, now “purchased.” That combination can be punitive and duplicative.

Here, the district court’s injunction was broad: it barred both continued use of CSC trade secrets and any use of “Post‑Misappropriation BaNCS Material” in the U.S. market. The Fifth Circuit reasons:

Both damages measures (avoided costs and income) include benefits tied to BaNCS itself (the improved platform and profits therefrom), not just possession of CSC’s underlying trade secrets.
Some portion of TCS’s unjust gain has already been realized in the past—e.g., acceleration of development, use during migration—before the injunction.
Some portion is prospective and tied to BaNCS’s future use; that is the portion that overlaps with an injunction barring BaNCS use.
The injunction’s additional prohibition on using CSC’s trade secrets (source code, manuals) is not duplicative; it protects CSC’s core IP interests going forward.

Balancing these, the court opts not to re‑engineer the damages award but to trim the injunction.

e. Remedy: Narrowing the Injunction Instead of Reducing Damages

The panel vacates the injunction and remands with specific instructions:

Remove the bar on TCS’s future use of “Post‑Misappropriation BaNCS Material” (i.e., BaNCS code and documentation as they exist after remediation of CSC content).
Maintain the prohibition on TCS’s access to and use of CSC’s trade secrets.
Clarify the definition of “TCS Parties” under Rule 65(d)(2) (discussed further below).

Doctrinally, the court also emphasizes:

Injunctions are an “extraordinary remedy,” appropriate only where legal remedies (money damages) are inadequate (DSC Communications v. Next Level).
Once the misappropriator has been required to disgorge the full value of its unjust gain, further equitable relief may be limited or unnecessary (as noted by Milgrim on Trade Secrets).

This is a key holding: where a defendant pays full avoided‑cost unjust enrichment, a court should be wary of simultaneously enjoining use of the fully “paid‑for” derived product, absent some separate reason (e.g., ongoing misuse of the underlying trade secrets themselves).

2. Exemplary Damages and Constitutional Limits

DTSA § 1836(b)(3)(C) authorizes exemplary damages of up to “2 times the amount of the damages awarded” for willful and malicious misappropriation. The district court imposed exactly that: roughly $112.3m in exemplary damages on top of $56.15m compensatory.

TCS argued due process under BMW v. Gore and State Farm v. Campbell, emphasizing that:

Compensatory damages were “substantial,” and
In some cases, a 1:1 punitive‑to‑compensatory ratio has been suggested as a possible upper bound.

The Fifth Circuit responds by:

Noting that Campbell struck down a 145:1 ratio and emphasized that “single‑digit” multipliers are more likely to be consistent with due process.
Observing that Gore upheld a 4:1 ratio.
Holding that where Congress has expressly capped exemplary damages at a particular ratio (here, 2:1), courts generally defer to that legislative judgment unless the cap itself violates due process (Abner v. Kansas City Southern).

On reprehensibility, the court applies the Campbell factors:

No physical injury or health/safety risk (weighs against high punitive damages).
No special financial vulnerability of CSC (neutral to slightly against).
Repeated, not isolated, misconduct: ongoing use of CSC materials over time (weighs in favor).
Intentional malice, trickery, or deceit: misrepresentations to Transamerica, internal circumvention of rules, failure to remediate (weighs strongly in favor).

The court also notes that trade secret injuries are often:

hard to detect, and
difficult to value precisely,

which justifies a higher multiplier in appropriate cases (Lincoln v. Case).

Given these factors and the statutory cap, the Fifth Circuit affirms the 2:1 exemplary damages award.

3. Scope of Injunction and Non‑Parties under Rule 65(d)(2)

Rule 65(d)(2) allows an injunction to bind:

(A) the parties;
(B) the parties’ officers, agents, servants, employees, and attorneys; and
(C) “other persons who are in active concert or participation with” anyone in (A) or (B).

The district court’s injunction defined “TCS Parties” to include “TCS and their respective affiliates, successors, directors, officers, employees, consultants, agents, servants, and attorneys, and any and all other persons who are in active concert or participation with any of them.”

The Fifth Circuit notes:

This language lumps together:
- entities clearly within Rule 65(d)(2)(B) (officers, agents, servants, employees, attorneys), and
- entities that can only be bound if they are “in active concert or participation” (affiliates, directors, successors, consultants).
Under Regal Knitwear and Le Tourneau, naming a non‑party (e.g., a successor, affiliate, or consultant) does not expand the injunction beyond Rule 65(d)(2); they are bound only if they are in privity or in active concert or participation.

To avoid conflation and better track the rule’s structure, the Fifth Circuit directs the district court to adopt this definition on remand:

“‘TCS Parties’ means (i) TCS and TAIC; (ii) their officers, agents, servants, employees, and attorneys; and (iii) other persons who are in active concert or participation with anyone described in subsections (i) or (ii) (including directors, affiliates, successors, and consultants).”

This preserves the ability to bind non‑party affiliates and consultants but only to the extent they are actually assisting in violative conduct.

D. Precedents and Their Influence

Major precedents and how the Fifth Circuit uses them:

GlobeRanger Corp. v. Software AG, 836 F.3d 477 (5th Cir. 2016)
- Texas trade secret case; used by the district court for the specificity standard.
- The Fifth Circuit neither adopts nor rejects GlobeRanger for the DTSA, due to waiver.
University Computing Co. v. Lykes‑Youngstown Corp., 504 F.2d 518 (5th Cir. 1974)
- Recognized avoided‑cost damages as an appropriate measure where the secret retains value and plaintiff’s injury is hard to prove.
- Provides doctrinal support for DTSA avoided‑cost unjust enrichment here.
Bohnsack v. Varco, L.P., 668 F.3d 262 (5th Cir. 2012)
- Embraces a “flexible” trade secret damages regime, including development costs avoided.
- Undergirds the Fifth Circuit’s rejection of a rigid “compensable harm” overlay on unjust enrichment.
Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., 68 F.4th 792 (2d Cir. 2023)
- Vacated a large avoided‑cost award under the DTSA where the misappropriator’s benefit was already captured by plaintiff’s lost profits, and an injunction barred further unjust gain.
- The Fifth Circuit:
  - Agrees on the no‑double‑recovery principle and on the importance of injunctions, but
  - Rejects any generalized requirement that the trade secret owner show separate “compensable harm” beyond defendant’s gain.
Computer Associates Int’l v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992)
- Cited (via GlobeRanger) for the principle that a complaint itself can put a defendant on notice regarding misappropriation.
United States ex rel. Vavra v. KBR, 848 F.3d 366 (5th Cir. 2017)
- Imputation of knowledge from employees with “somewhat significant managerial authority” over relevant activities.
- Used to impute TCS managers’ knowledge to the company for DTSA mens rea.
State Farm v. Campbell, 538 U.S. 408 (2003), and BMW v. Gore, 517 U.S. 559 (1996)
- Provide due process guideposts for punitive/exemplary damages (reprehensibility, ratio, comparable sanctions).
- Support the conclusion that a 2:1 statutory maximum is constitutional in these circumstances.
Abner v. Kansas City Southern R. Co., 513 F.3d 154 (5th Cir. 2008)
- When Congress sets a punitive cap, the Gore/Campbell analysis focuses on whether the cap itself is unconstitutional; individual awards within the cap are presumptively valid.
- Applies here to DTSA’s 2x cap.
Regal Knitwear Co. v. NLRB, 324 U.S. 9 (1945), and Le Tourneau Co. v. NLRB, 150 F.2d 1012 (5th Cir. 1945)
- Clarify that injunctions bind parties and their privies or those in active concert; mere naming of successors or affiliates cannot enlarge the injunction beyond Rule 65(d)(2).
- Support the Fifth Circuit’s insistence on a Rule‑tracking definition of “TCS Parties.”

E. Key Doctrinal Contributions / New Principles

The decision advances several important doctrinal points under the DTSA and federal remedial law:

Strict Reading of “Solely for the Benefit of” in Third‑Party Access Provisions
Third‑party consultants operating under an addendum that permits access “solely for the benefit” of a licensee cannot:
- use the licensor’s trade secrets to build a competing product, or
- leverage those secrets to win contracts—even with that same licensee—absent express authorization from the trade secret owner.
DTSA Unjust Enrichment Does Not Require Additional “Compensable Harm” to the Trade Secret Owner
The Fifth Circuit rejects any reading of § 1836(b)(3)(B)(i)(II) that would:
- condition unjust enrichment damages (including avoided costs) on proving some separate, quantifiable injury beyond the misappropriator’s gain.
Instead, classic restitution principles apply: wrongful gain alone can justify restitution, provided there is no double counting with actual loss or injunctive relief.
Clarification of the Interaction Between Unjust Enrichment and Injunctions
The court articulates a coherent, two‑step approach:
- Step 1: Determine the misappropriator’s unjust gain (e.g., avoided costs), independent of actual loss.
- Step 2: Ensure that any injunction does not re‑strip that same gain after the defendant has paid its equivalent in money—i.e., avoid making the defendant pay for development and then prohibiting it from using the developed product.
This is a practical blueprint for trial courts balancing monetary and equitable DTSA remedies.
Exemplary Damages Under DTSA: Statutory 2x Cap Is Presumptively Constitutional
By affirming a 2:1 ratio as within Congress’s express DTSA cap, the court:
- confirms that, absent extraordinary circumstances, awards at or below that cap will generally satisfy Gore/Campbell.
- emphasizes that repeated, deceptive misappropriation can justify the statutory maximum even where harms are purely economic.
Rule 65(d)(2) as a Ceiling on Who May Be Bound by DTSA Injunctions
The decision clarifies that:
- Injunctions may bind affiliates, successors, and consultants only to the extent they fall within Rule 65(d)(2)(B) or are in “active concert or participation” under (C).
- Drafting should reflect this structure to avoid ambiguity and over‑breadth.
Open Question: DTSA‑Specific Specificity Standard for Trade Secrets
The court deliberately leaves unresolved what degree of specificity the DTSA requires for identifying trade secrets, signaling that:
- Future cases may develop a DTSA‑tailored standard, potentially in dialogue with state law and other circuits.

F. Practical Implications and Impact

1. For Software Vendors and Licensees

Drafting Third‑Party Addenda:
- Vendors should expressly state that third‑party consultants:
  - may not use the vendor’s confidential information to build, improve, or support competing products;
  - may not use such information to prepare bids for replacing the vendor’s software (even with the same customer); and
  - must obtain vendor consent for any use beyond specified maintenance/migration tasks.
- Licensees should understand they cannot grant their outsourcers broader rights than they themselves possess.
Rebadging and Staff Mobility:
- Where employees who worked on a vendor’s system are “rebadged” to a competitor, clear guardrails are essential—NDAs, IP boundaries, and training on what cannot be carried over.

2. For Outsourcers and Systems Integrators

Do Not Rely Solely on the Customer’s Say‑So:
- TCS’s internal IP policy required securing licenses from the IP owner; ignoring that requirement proved fatal.
- Outsourcers should:
  - obtain copies of relevant vendor–customer licenses and addenda;
  - seek written confirmation from the vendor (where feasible) for any non‑obvious use; and
  - avoid using vendor documentation or code to speed up development of competing products without explicit permission.
Avoided‑Cost Exposure:
- Under this decision, DTSA unjust enrichment can be measured by the full R&D costs saved through misappropriation, even absent proof of the vendor’s lost profits.
- That measure can reach tens or hundreds of millions of dollars in complex platform cases.

3. For DTSA Litigants and Courts

Remedy Structuring:
- Plaintiffs must think strategically: Do they want to:
  - eliminate a competitor’s product from the market via injunction, or
  - monetize the misappropriation through avoided‑cost or profit‑based unjust enrichment?
- Court’s approach suggests:
  - If plaintiff obtains full avoided‑cost recovery, broad bans on a defendant’s post‑cleansing use of its own product may be narrowed.
  - If plaintiff instead seeks to destroy the value of the misappropriator’s product (e.g., via injunction), unjust enrichment may be limited to past exploitation.
Exemplary Damages Leverage:
- Willful and malicious misappropriation, as construed here, can be found where:
  - the defendant ignores its own IP compliance procedures,
  - receives explicit complaints from the trade secret owner, and
  - continues to exploit the information while making misleading assurances to customers.
- Given the 2x cap, exemplary damages can be large in absolute terms in high‑value technology cases.
Injunction Drafting Under Rule 65(d)(2):
- Injunctions should be written in a way that:
  - tracks parties and agents under 65(d)(2)(A)–(B); and
  - refers to affiliates, successors, consultants, etc., explicitly as “persons in active concert or participation.”
- This case provides a model definitional clause other courts may adopt or adapt.
Future Development of DTSA Specificity Doctrine:
- Because the Fifth Circuit declined to decide the trade secret specificity standard, future appellants will likely brief this issue more fully.
- Counsel should be prepared to:
  - distinguish between “category‑level” descriptions and granular identification, and
  - address the tension between discovery needs and confidentiality in trade secret pleading.

IV. Complex Concepts Simplified

1. “Misappropriation” Under the DTSA

A defendant misappropriates a trade secret if it:

Acquires the trade secret knowing (or having reason to know) it was obtained by improper means; or
Uses or discloses it without consent and knows (or has reason to know) that:
- it was acquired by improper means, or
- it came from someone who had a duty to keep it secret, or
- it was acquired by accident or mistake before the defendant realized it was a protected trade secret.

“Improper means” includes theft, misrepresentation, and breach of a duty to maintain secrecy. Using trade secrets beyond authorized contractual scope can constitute improper means when the user knows or should know about those limitations.

2. Unjust Enrichment and “Avoided Costs”

Unjust enrichment is about the defendant’s gain, not the plaintiff’s loss. In trade secret cases, it often appears as:

Profits gained through use of the trade secret (e.g., sale of products or services), or
Costs avoided by using the trade secret instead of independently developing equivalent technology.

“Avoided costs” are the R&D or engineering expenses the defendant would have incurred to reach the same capability without misappropriation. Making the defendant pay those costs restores it to the position it would occupy if it had developed the technology lawfully.

3. “Actual Loss” vs. “Unjust Enrichment” Under the DTSA

Actual loss compensates the trade secret owner for harms like:
- lost profits from sales diverted to the misappropriator;
- price erosion; or
- loss of licensing opportunities.
Unjust enrichment captures benefits the misappropriator received that are not already accounted for in the actual‑loss calculation.

The statute explicitly forbids double counting: unjust enrichment can only cover gains “not addressed” in computing actual loss.

4. Exemplary (Punitive) Damages and Ratios

Exemplary or punitive damages punish and deter especially bad behavior. Courts examine:

How reprehensible the conduct was (intentional, repeated, deceitful, etc.).
The ratio of punitive to compensatory damages; very high ratios may violate due process, especially when compensatory damages are already substantial.
How the award compares to statutory penalties or similar cases.

Under the DTSA, Congress capped exemplary damages at 2x compensatory damages. That cap shapes how courts apply constitutional limits.

5. Rule 65(d)(2): Who Can Be Bound by an Injunction?

An injunction can bind:

Named parties in the lawsuit.
Their officers, agents, servants, employees, and attorneys.
Other persons or entities who:
- know about the injunction, and
- act in “active concert or participation” with a bound party to violate it.

Merely being an affiliate or successor does not automatically subject an entity to an injunction; there must be privity or active cooperation in the prohibited conduct.

V. Conclusion

Key Takeaways

“Solely for the benefit of” in third‑party access clauses will be enforced strictly; outsourcing partners cannot boot‑strap such clauses into a license to build competing products.
The DTSA allows robust unjust enrichment damages— including avoided R&D costs—without requiring proof of separate “compensable harm,” but those damages cannot overlap with the effects of injunctions or actual loss measures.
Where a misappropriator fully disgorges its unjust gain, courts should carefully limit injunctions so as not to duplicate that remedy, particularly with respect to the misappropriator’s own, now effectively “paid for,” derivative products.
Willful and malicious misappropriation, as demonstrated by intentional misuse and disregard of the owner’s rights, can justify the DTSA’s maximum 2x exemplary damages, consistent with constitutional limits.
DTSA injunctions must conform to Rule 65(d)(2); non‑parties like affiliates and consultants can be bound only insofar as they are in active concert or participation with bound parties.
The Fifth Circuit leaves open, for future development, the precise DTSA standard for how specifically trade secrets must be defined.

In sum, CSC v. TCS is a foundational Fifth Circuit decision on DTSA remedies and third‑party access to licensed software. It strengthens trade secret owners’ ability to obtain large unjust enrichment awards while simultaneously constraining overbroad injunctive relief and clarifying the limits of contractual authorization in complex outsourcing settings. It will likely become a central reference point for future DTSA litigation involving software platforms, systems integrators, and multi‑party licensing structures.

Unjust Enrichment, Injunctions, and Third-Party Access Under the DTSA: A Comprehensive Commentary on Computer Sciences Corp. v. Tata Consultancy Services Ltd., No. 24‑10749 (5th Cir. Nov. 21, 2025)