Filing A Patent Application Covering A Misappropriated Trade Secret Held To Constitute A “Use” Which Justifies $600,000 In Compensatory Damages

Quoting Section 40, comment c, of the Restatement (Third) of Unfair Competition, the Fifth Circuit Court of Appeals held recently that “Any exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant” constitutes a “use” giving rise to liability for misappropriation (emphasis added). So, when Varco, LLP filed its own patent application with respect to another person’s invention which had been disclosed to Varco in confidence, Varco “used” the trade secret. Although no patent ever was issued, the jury’s compensatory damages award of $600,000 against Varco and in favor of the inventor was warranted. Bohnsack v. Varco, LLP, No. 10-20741 (5th Cir., Jan. 23, 2012).

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