## Facts

- LinkCo, Inc., formed in 1995, developed software and related systems intended to support electronic corporate disclosure for Japanese public companies.
- LinkCo developed multiple internal systems (including data processing and electronic conversion tools) but did not commercialize a product and ceased operations in December 1997.
- Kyoto Kanda, a senior LinkCo executive with broad access to LinkCo’s technology and business information, signed nondisclosure and noncompetition agreements and left LinkCo at the end of 1997.
- Fujitsu Ltd., developing corporate disclosure software, later announced “DisclosureVision” in 1999.
- LinkCo sued in 2000, alleging Fujitsu’s DisclosureVision copied LinkCo’s trade secret technology and asserting misappropriation of trade secrets and related business tort claims.
- The dispute addressed here arose at trial over the proper measure of damages and corresponding jury instructions for trade secret misappropriation.

## Issues

1. What measures of damages are available for trade secret misappropriation (plaintiff’s loss, defendant’s unjust enrichment, reasonable royalty), and when may each be used?
2. May a plaintiff pursue both lost-profit and unjust-enrichment theories, and how must the jury be instructed to prevent duplicative recovery?
3. When losses or profits are hard to quantify, is a reasonable royalty an available alternative, and what evidentiary limits apply?

## Decision

- The court held that trade secret damages may be measured by the plaintiff’s actual losses or the defendant’s unjust enrichment, and may also be measured by a reasonable royalty in appropriate circumstances.
- The court permitted presentation of alternative damages theories but required that any award compensate only once for the same injury.
- The court recognized reasonable royalty damages where loss or enrichment is difficult to measure, but required a non-speculative evidentiary basis for any royalty determination.
- The court directed that jury instructions reflect these alternative measures while preventing “double counting.”

## Legal Principles

- Damages for trade secret misappropriation may be calculated using either (a) the plaintiff’s losses or (b) the defendant’s profits attributable to the misappropriation (unjust enrichment).
- A plaintiff may plead and try multiple damages theories, but cannot recover duplicative amounts for the same harm under different labels.
- Reasonable royalty damages are available in trade secret cases as a substitute measure when loss or unjust enrichment is not susceptible to reliable proof.
- Any damages theory (including royalties) must be supported by evidence establishing causation and amount with reasonable certainty; speculation is insufficient.

## Conclusion

The court articulated a flexible but non-duplicative framework for trade secret misappropriation damages, allowing proof of plaintiff losses, defendant unjust enrichment, or a reasonable royalty where measurement is difficult, while requiring jury instructions and evidence that avoid double recovery and unsupported estimates.


LinkCo, Inc. v. Fujitsu Ltd., 232 F. Supp. 2d 182 (S.D.N.Y. 2002)