{"id":1041,"date":"2018-02-06T19:21:57","date_gmt":"2018-02-06T19:21:57","guid":{"rendered":"https:\/\/www.bfvlaw.com\/attorneys-fees-under-the-gtsa-for-claims-made-in-bad-faith\/"},"modified":"2022-08-04T17:32:03","modified_gmt":"2022-08-04T17:32:03","slug":"attorneys-fees-under-the-gtsa-for-claims-made-in-bad-faith","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/attorneys-fees-under-the-gtsa-for-claims-made-in-bad-faith\/","title":{"rendered":"Attorneys\u2019 Fees under the GTSA for Claims Made in Bad Faith"},"content":{"rendered":"

It is common for litigants to have questions about their eligibility to be awarded attorneys\u2019 fees<\/a> from the opposing party.\u00a0 The general rule is that each party in litigation bears its own attorneys\u2019 fees<\/a> except where specific contractual or statutory authority provides for fee shifting.\u00a0 In trade secret litigation, eligibility for attorneys\u2019 fees is governed by the Georgia Trade Secrets Act (\u201cGTSA\u201d). The GTSA provides a statutory exception to the general rule, allowing the court to award the prevailing party its attorneys\u2019 fees under certain circumstances.<\/p>\n

Georgia is one of many states that has adopted the Uniform Trade Secrets Act<\/a> (\u201cUTSA\u201d).\u00a0 Codified as O.C.G.A. section 10-1-760, et seq.<\/em>, the Georgia Trade Secrets Act (\u201cGTSA\u201d) provides a statutory cause of action for a misappropriation of trade secrets.<\/p>\n

The GTSA specifically includes an attorneys\u2019 fees provision that provides: \u201cIf a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may<\/em> award reasonable attorneys\u2019 fees to the prevailing party<\/em>.\u201d\u00a0 O.C.G.A. \u00a7 10-1-764.\u00a0 The GTSA thus permits, but does not require, an award of attorneys\u2019 fees to the prevailing party under certain circumstances.\u00a0 Whether to grant such fees is fully within the discretion of the court.<\/p>\n

One circumstance in which fees may be awarded is where a GTSA claim is made in \u201cbad faith\u201d.\u00a0 Once a party successfully prevails against a misappropriation of trade secrets claim under the GTSA, the party may seek fees if the claim was brought in \u201cbad faith\u201d.<\/p>\n

Unfortunately, the GTSA does not define \u201cbad faith\u201d and Georgia case law applying O.C.G.A. section 10-1-764 is lacking.\u00a0 However, cases from other jurisdictions that have adopted versions of the UTSA with similar fee-shifting provisions provide insight into what constitutes a claim made in \u201cbad faith\u201d.<\/p>\n

Such authority sets forth a two-pronged approach to determine (1) if the claim was \u201cobjectively specious\u201d and (2) if the plaintiff showed \u201csubjective misconduct\u201d in bringing the claim.\u00a0 Rent Info. Tech. v. Home Depot U.S.A., Inc.<\/em>, 268 Fed. App\u2019x 555, 558 (9th Cir. 2008) (construing O.C.G.A. \u00a7 10-1-764).<\/p>\n

Objective speciousness is found where there is a complete lack of evidence supporting the misappropriation claim.\u00a0 Id.<\/em>\u00a0 For example, a court found objective speciousness where the plaintiff failed to produce a witness who could testify with particularity about the trade secrets supposedly misappropriated.\u00a0 Hill v. Best Med. Int’l, Inc.<\/em>, No. CA 07-1709, 2011 WL 6749036, at *8 (W.D. Pa. Dec. 22, 2011).<\/p>\n

Subject misconduct exists where the plaintiff knows or is reckless in not knowing the claim for misappropriation has no merit.\u00a0 Rent Info. Tech<\/em>, 268 Fed. App\u2019x at 558.\u00a0 Subject misconduct can be found where a plaintiff knowingly persists in an invalid misappropriation claim.\u00a0 Contract Materials Processing, Inc. v. Kataleuna GmbH Catalysts<\/em>, 222 F. Supp. 2d 733, 744-745 (D. Md. 2002).\u00a0 \u201cBad faith may be inferred where the specific shortcomings of the case are identified by opposing counsel, and the decision is made to go forward despite the inability to respond to the arguments raised.\u201d\u00a0 Gemini Aluminum Corp. v. Cal.Custom Shapes, Inc.<\/em>, 95 Cal. App. 4th 1249, 1264 (2002).<\/p>\n

Whether bringing a misappropriation claim under the GTSA or defending against one, a party would do well to keep the attorneys\u2019 fees provision in mind.\u00a0 A potential plaintiff should understand and be able to identify the trade secrets misappropriated and carefully consider the parties against whom the claim is brought.\u00a0 A defendant should prepare its case with an eye towards potentially seeking fees where warranted.<\/p>\n","protected":false},"excerpt":{"rendered":"

It is common for litigants to have questions about their eligibility to be awarded attorneys\u2019 fees from the opposing party.\u00a0 The general rule is that each party in litigation bears its own attorneys\u2019 fees except where specific contractual or statutory authority provides for fee shifting.\u00a0 In trade secret litigation, eligibility for attorneys\u2019 fees is governed […]<\/p>\n","protected":false},"author":5,"featured_media":1042,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[156,29],"acf":[],"yoast_head":"\nAttorneys\u2019 Fees under the GTSA for Claims Made in Bad Faith<\/title>\n<meta name=\"description\" content=\"It's common for litigants to have questions about eligibility 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