Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. ( 2022 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0237p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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CAUDILL SEED & WAREHOUSE CO., INC.,
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Plaintiff-Appellee, │
> No. 21-5345
│
v. │
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JARROW FORMULAS, INC., │
Defendant-Appellant. │
┘
Appeal from the United States District Court for the Western District of Kentucky at Louisville.
No. 3:13-cv-00082—Charles R. Simpson, III, District Judge.
Argued: April 28, 2022
Decided and Filed: November 10, 2022
Before: SUHRHEINRICH, MOORE, and CLAY, Circuit Judges.
_________________
COUNSEL
ARGUED: David R. Carpenter, SIDLEY AUSTIN LLP, Los Angeles, California, for
Appellant. Benjamin J. Lewis, DENTONS BINGHAM GREENEBAUM LLP, Louisville,
Kentucky, for Appellee. ON BRIEF: David R. Carpenter, SIDLEY AUSTIN LLP, Los
Angeles, California, Christopher A. Eiswerth, Daniel J. Hay, SIDLEY AUSTIN LLP,
Washington, D.C., for Appellant. Benjamin J. Lewis, J. Mark Grundy, Jared A. Cox, Amanda
D. Reed, Kyle W. Miller, DENTONS BINGHAM GREENEBAUM LLP, Louisville, Kentucky,
for Appellee.
The court delivered a PER CURIAM opinion. MOORE, J. (pp. 32–34), delivered a
separate opinion concurring in part and dissenting in part.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 2
_________________
OPINION
_________________
PER CURIAM. Caudill Seed & Warehouse Co. manufactures an important ingredient in
certain nutritional supplements. Jarrow Formulas, Inc., a customer of Caudill’s, wanted to get
into this manufacturing business. To do this, Jarrow decided to lure away Caudill’s Director of
Research, Kean Ashurst, and learn Caudill’s manufacturing process from him. Caudill,
understandably displeased, proceeded to federal court. Eight years later, a jury awarded Caudill
approximately $7,000,000 in damages under the Kentucky Uniform Trade Secrets Act
(“KUTSA”). Jarrow appeals the district court’s denial of its motions for judgment
notwithstanding the verdict and for a new trial. We AFFIRM.
I. BACKGROUND
A. Facts
Caudill is a Kentucky business that manufactures and sells a wide range of agricultural
products including seeds, fertilizers, and sprouts. One Caudill subsidiary, C.S. Health, develops
nutritional supplements. And one such supplement, made using broccoli-seed extract, attempts
to harness a substance called glucoraphanin, which some believe to have positive health effects
when consumed. Specifically, the glucoraphanin found in broccoli seeds reacts with myrosinase,
an enzyme also found in broccoli seeds, to create in the digestive tract a supposedly beneficial
compound called sulforaphane.
Caudill has developed a nutritional supplement ingredient containing high concentrations
of glucoraphanin, which it sells to producers under the trade name BroccoRaphanin. Caudill also
manufactures and distributes glucoraphanin capsules for individual use called Vitalica and
Vitalica Plus. Vitalica and Vitalica Plus are “activated” products: they add myrosinase into the
production formula to increase the amount of sulforaphane produced in the small intestine.
Jarrow Formulas is a dietary-supplement company that sells a broccoli-seed extract called
BroccoMax. To manufacture BroccoMax, Jarrow purchased glucoraphanin-containing powder
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 3
in bulk from Caudill, eventually becoming Caudill’s largest customer for the powder. Before the
events that precipitated this dispute, Jarrow did not produce its own glucoraphanin, myrosinase,
or sulforaphane. That would change.
Jarrow eventually decided to design and sell its own activated glucoraphanin product “to
increase the margins for Jarrow Formulas for the BroccoMax product and develop a higher level
of pull-through at the retail level.” Instead of investing in its own research and development,
Jarrow took a shortcut when it solicited Kean Ashurst, Caudill’s Director of Research.
Jarrow approached Ashurst for a reason. He had worked at Caudill for nine years, during
which he played a major role in the firm’s research and development efforts. This included
extensively researching the development of the broccoli-seed derivatives at issue in this case. As
part of Ashurst’s research, he assembled a collection of over 2000 articles concerning broccoli,
the effects of sulforaphane on the body, and the myrosinase glucosinolate system. In the course
of his employment with Caudill, Ashurst signed Non-Disclosure, Non-Competition, and Secrecy
Agreements, and annually reviewed and signed Caudill’s employee handbook, which barred him
from disclosing Caudill’s trade secrets or other confidential information.
Ashurst and Jarrow’s relationship evolved rapidly. On April 10, 2011, Ashurst—who
was still a Caudill employee, although Jarrow had approached him by this point—emailed
Jarrow’s CEO several confidential Caudill documents. Ten days later, Jarrow requested a “zip of
the pertinent data”—presumably a large volume of data compressed into a .zip file—and Ashurst
apparently1 obliged by sending a physical disc the next week. On May 1, Ashurst began to work
for Jarrow as a consultant. The next day, Ashurst submitted his resignation letter to Caudill,
resigning from the firm. The “Scope of Services” listed in Ashurst’s Consulting Agreement with
Jarrow made clear that Jarrow hired him to mimic the work he had done for Caudill, tasking him
with assisting in sourcing broccoli seeds; using the seeds to procure sulforaphane, glucoraphanin,
and glucosinolate products; and performing “Other projects related to seeds.”
Ashurst’s expertise proved very useful for Jarrow. Jarrow never conducted its own
research on broccoli extract products. Instead, Ashurst provided Jarrow with what the research it
1
According to Caudill, Jarrow never produced the disc in this litigation.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 4
was “looking for” by delivering a curated collection of broccoli product research compiled over
his nine years with Caudill. A Jarrow scientist acknowledged that only someone who “spen[t] all
their time” researching broccoli products could have produced such a useful research collection.
Jarrow sent Ashurst an outline of tasks that it wanted Ashurst to complete, including providing
information on ordering research steps, performing every step, solving “R&D issues,” and
blending the final product. Ashurst complied, adding that he was proposing that Jarrow adopt
“the same process that the current BroccoMax Material [uses]”—that is, the process that Caudill
used to manufacture the raw materials that Jarrow purchased from Caudill to make BroccoMax.
Over the coming months, Ashurst provided to Jarrow additional valuable information from
Caudill. Ashurst at one point bragged to Jarrow employees that they would be using a formula
that had been tested for over six months. At the time, Ashurst had been at Jarrow for just over
one month, meaning that he must have performed substantial amounts of this research while at
Caudill.
Jarrow profited handsomely from this research. Jarrow brought an activated broccoli
product into commercial production just four months after hiring Ashurst. From 2012 to 2019,
Jarrow earned $7.5 million in sales of their activated-myrosinase BroccoMax product.
B. Procedural History
Perturbed by these developments, Caudill initiated this lawsuit. In August 2014, Caudill
amended its complaint to add a claim under the KUTSA, which is the only claim relevant to this
appeal. Caudill identified six trade secrets that Jarrow allegedly misappropriated, three of which
are relevant here: “(1) research and development on supplements, broccoli, and chemical
compounds; (2) the general manufacturing process detailed in Caudill Seed’s provisional patent
application; . . . and (6) the hard drive and research notebook as described herein.” Jarrow
argued at the summary-judgment phase that Caudill insufficiently defined its trade secrets. The
district court rejected this contention, concluding that “genuine issues of material fact exist with
respect to whether the information so identified constitutes trade secrets.”
The case proceeded to trial. After hearing weeks of testimony, the jury made the
following findings:
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 5
• Caudill had a protectable trade secret regarding Trade Secrets 1, 3, 4, 5, and 6;
• Jarrow misappropriated Trade Secrets 1, 3, 4, and 5;
• Caudill was entitled to $2,023,000 in actual losses and $404,605 in unjust
enrichment as to Trade Secret 1, but was not entitled to damages on the other
trade secrets; and
• Jarrow willfully and maliciously misappropriated Trade Secrets 1, 3, 4, and 5.
Jarrow moved for judgment as a matter of law and for a new trial as to liability,
compensatory damages, and the jury’s willfulness and malice finding. Regarding the finding of
misappropriation of Trade Secret 1, Jarrow argued that Caudill had improperly asserted a
“kitchen-sink theory of trade secrets” by broadly defining all its research activities as
components of Trade Secret 1. With respect to the compensatory damages award, Jarrow argued
that the jury’s award of all of Caudill’s research-and-development costs for the period that
Ashurst worked for Caudill was improper because Caudill did not demonstrate that the trade
secret was destroyed or made public. Jarrow argued that the unjust-enrichment damages could
not stand because it was “plagued by speculation and guesswork.” Finally, concerning willful
and malicious misappropriation, Jarrow argued that the record showed no evidence of Jarrow’s
malice towards Caudill, just motivation to compete and an awareness of wrongdoing.
The district court denied Jarrow’s motion. The district court entered a judgment of
$2,427,605 in damages awarded by the jury, $1,000,000 in exemplary damages, $3,254,303.50
in attorney fees, and $69,871.82 in costs against Jarrow. Jarrow timely appealed.
II. DISCUSSION
On appeal, Jarrow raises a litany of issues. Jarrow asserts that (1) Caudill failed to define
Trade Secret 1 adequately; (2) Caudill failed to show that Jarrow acquired Trade Secret 1;
(3) Caudill did not introduce sufficient evidence attributing its damages to the misappropriate of
Trade Secret 1; (4) the award of $2,023,000 in compensatory damages lacked a legal and factual
basis; (5) the award of $404,605 in unjust-enrichment damages lacked a legal and factual basis;
and (6) the district court improperly assessed exemplary damages and attorney fees. Jarrow also
argues that, should we vacate the award of compensatory damages, we should similarly vacate
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the awards of exemplary damages and attorney fees for recalculation. We take each issue in
turn.
A. Caudill Adequately Defined Trade Secret 1
Jarrow argues that Caudill insufficiently defined Trade Secret 1 at trial. We first must
weave through a procedural thicket to see whether Jarrow’s contention is even properly before
this court on appeal and, if so, what standard of review applies to Jarrow’s claim. After settling
these matters, we discuss trade secrets broadly and Caudill’s combination trade secret
specifically. At the end of this road, we conclude that Caudill suitably defined Trade Secret 1.
Turning to the issue of presentation, Caudill argues that Jarrow, by failing to object to the
jury instructions, forfeited its challenge to Caudill’s failure to define Trade Secret 1 properly,
which Jarrow sometimes casts as the district court’s failure to force Caudill to so define the
secret. The rule, however, is not so simple. The failure to object to jury instructions “does not
prevent normal appellate review” so long as a party “ma[kes] all necessary arguments to preserve
the issues raised in its appeal in its Rule 56 motion for summary judgment and in its Rule 50(b)
motion for judgment as a matter of law or alternatively for a new trial.” K&T Enters., Inc. v.
Zurich Ins. Co., 97 F.3d 171, 174–75 (6th Cir. 1996); see also City of St. Louis v. Praprotnik,
485 U.S. 112, 119–20 (1988) (plurality op.).
Jarrow made the necessary arguments. Jarrow challenged Trade Secret 1’s definition in
its motion for judgment as a matter of law at trial, and in its renewed motion for judgment as a
matter of law after trial. It is true that Jarrow’s summary-judgment briefing challenged the
definition of only the trade secrets allegedly contained in the notebook and on the hard drive, not
Trade Secret 1. But once Caudill put Trade Secret 1 at issue in its response, Jarrow challenged
Trade Secret 1’s definition in its reply brief. Taking these references together, we conclude that
Jarrow sufficiently preserved its objection to the jury instructions.
We now must determine our standard of review. After trial, Jarrow moved for both
judgment as a matter of law and a new trial. We review de novo the district court’s denial of
Jarrow’s Rule 50 motion. Nolfi v. Ohio Ky. Oil Corp., 675 F.3d 538, 545 (6th Cir. 2012). The
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standard we apply in reviewing Jarrow’s motion for judgment as a matter of law, on the other
hand, depends on whether Jarrow challenges the sufficiency of the evidence. In federal court:
If a party has been fully heard on an issue during a jury trial and the court finds
that a reasonable jury would not have a legally sufficient evidentiary basis to find
for the party on that issue, the court may:
(A) resolve the issue against the party; and
(B) grant a motion for judgment as a matter of law against the party on a claim or
defense that, under the controlling law, can be maintained or defeated only with a
favorable finding on that issue.
Fed. R. Civ. P. 50(a)(1). “In diversity cases, when a Rule 50 motion for judgment as a matter of
law is based on a challenge to the sufficiency of the evidence, [however,] this Court applies the
standard of review used by the courts of the state whose substantive law governs the action.”
Kusens v. Pascal Co., 448 F.3d 349, 360 (6th Cir. 2006). Under Kentucky law, a directed
verdict after trial “is only appropriate when ‘there is a complete absence of proof on a material
issue or if no disputed issues of fact exist upon which reasonable minds could differ.’” Alph C.
Kaufman, Inc. v. Cornerstone Indus. Corp., 540 S.W.3d 803, 817–18 (Ky. Ct. App. 2017)
(quoting Toler v. Süd–Chemie, Inc., 458 S.W.3d 276, 285 (Ky. 2014)).
Jarrow also appeals the district court’s denial of its motion for a new trial. A court may
grant a new trial “for any reason for which a new trial has heretofore been granted in an action at
law in federal court.” Fed. R. Civ. P. 59(a)(1)(A).
We have interpreted Rule 59 to mean that “a new trial is warranted when a jury
has reached a ‘seriously erroneous result’ as evidenced by: (1) the verdict being
against the weight of the evidence; (2) the damages being excessive; or (3) the
trial being unfair to the moving party in some fashion, i.e., the proceedings being
influenced by prejudice or bias.”
Mosby-Meachem v. Memphis Light, Gas, & Water Div., 883 F.3d 595, 606 (6th Cir. 2018)
(quoting Holmes v. City of Massillon, 78 F.3d 1041, 1045–46 (6th Cir. 1996)). We apply abuse-
of-discretion review to the district court’s denial of a motion for a new trial. Broad St. Energy
Co. v. Endeavor Ohio, LLC, 806 F.3d 402, 405–06 (6th Cir. 2015). “A district court abuses its
discretion when it relies on clearly erroneous findings of fact, applies the law improperly, or uses
an erroneous legal standard.” United States v. Pembrook, 609 F.3d 381, 383 (6th Cir. 2010).
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 8
With those issues resolved, we turn to the main event: whether Caudill defined Trade
Secret 1 with “sufficient definiteness” at trial. Restatement (Third) of Unfair Competition § 39
cmt. d (Am. L. Inst. 1995).
1. Caudill Sufficiently Explained Trade Secret 1’s Contents
The KUTSA defines a trade secret as
information, including a formula, pattern, compilation, program, data, device,
method, technique, or process, that: (a) Derives independent economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (b) Is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
Ky. Rev. Stat. § 365.880(4). In interpreting this language, we can look beyond Kentucky court
decisions: the KUTSA is a version of a uniform statute adopted in many jurisdictions and states
that it “shall be applied and construed to effectuate its general purpose to make uniform the law
. . . among states enacting it.” Id. at § 365.894; see Allied Erecting & Dismantling Co. v.
Genesis Equip. & Mfg., Inc., 805 F.3d 701, 703 (6th Cir. 2015); Auto Channel, Inc. v.
Speedvision Network, LLC, 144 F. Supp. 2d 784, 788 (W.D. Ky. 2001). Although few Kentucky
cases apply the KUTSA, the Kentucky Supreme Court has relied on the Restatement (Third) of
Unfair Competition in the past. See, e.g., Montgomery v. Montgomery, 60 S.W.3d 524, 528 nn.3,
11, 13 (Ky. 2001). Consequently, we will return to this Restatement repeatedly throughout the
opinion.
“A trade secret is any information that can be used in the operation of a business or other
enterprise and that is sufficiently valuable and secret to afford an actual or potential economic
advantage over others.” Restatement (Third) of Unlawful Competition § 39 (Am. L. Inst. 1995).
Trade Secret 1 is what is known as a “combination” trade secret. “[A] new combination of
known steps or processes can be entitled to trade-secret protection.” Mike’s Train House, Inc. v.
Lionel, L.L.C., 472 F.3d 398, 411 (6th Cir. 2006), abrogated on other grounds as recognized by
A.K. ex rel. Kocher v. Durham Sch. Servs., L.P., 969 F.3d 625, 629–30 (6th Cir. 2020). Caudill
claims—and the jury found—protection not for one specific piece of information, but rather for
its entire process of research and development. In assessing Caudill’s case, we take heed of the
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maxim that “[i]t is not possible to state precise criteria for determining the existence of a trade
secret.” Restatement (Third) of Unlawful Competition § 39 cmt. d (Am. L. Inst. 1995). Still,
caselaw provides some general guiding principles. “The fact that some or all of the components
of [a combination] trade secret are well-known does not preclude protection for a secret
combination, compilation, or integration of the individual elements.” Id. cmt. f. Indeed, “a
plaintiff may prevail in a trade-secrets case without identifying a specific item of information
that is not publicly known or readily accessible.” Mike’s Train House, 472 F.3d at 410 (citing
3M v. Pribyl, 259 F.3d 587, 595–96 (7th Cir. 2001)); see also Melvin F. Jager, 1 Trade Secrets
Law § 5:28 (Oct. 2021) (“Even if each and every element in a process is known to the industry,
the combination of known elements will have sufficient novelty to be a trade secret if the
combination produces a superior product.”).
Although a combination-trade-secret plaintiff need not show that any individual item in a
combination trade secret is unique, the plaintiff must establish that “the combination of known
elements or components is unique.” Melvin F. Jager, 1 Trade Secrets Law § 5:28 (Oct. 2021);
see also Sit-Up Ltd. v. IAC/InterActiveCorp., No. 05 Civ. 9292, 2008 WL 463884, at *9
(S.D.N.Y. Feb. 20, 2008). A plaintiff must “offer[] . . . concrete evidence that its business
method uniquely strung together certain elements in a particular way[,]” and cannot “have the
Court [or jury] infer that, because it ran a successful . . . business, its combination of various,
possibly secret, data and business protocols must have been unique.” Sit-Up, 2008 WL 463884,
at *10. Because all of a combination trade secret’s elements may individually be publicly
known, the uniqueness of the combination is critical to establishing trade-secret protection.
In addition to showing novelty, a trade-secrets plaintiff must “defin[e] the information for
which protection is sought with sufficient definiteness to permit a court to apply the criteria for
protection described in this Section and to determine the fact of an appropriation.” Restatement
(Third) of Unfair Competition § 39 cmt. d (Am. L. Inst. 1995). The trade secret must be defined
with “reasonable particularity.” Phoenix Process Equip. Co. v. Cap. Equip. & Trading Corp.,
No. 3:16-cv-00024, 2021 WL 1062553, at *16 (W.D. Ky. Mar. 19, 2021). Reasonable
particularity “must be ‘particular enough as to separate the trade secret from matters of general
knowledge in the trade or special knowledge of persons skilled in the trade.’” Id. (quoting
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Babcock Power, Inc. v. Kapsalis, No. 3:13-cv-717, 2015 WL 9257759, at *3 (W.D. Ky. Dec. 17,
2015)). If a plaintiff “effectively assert[s] that all information in or about its [product] is a trade
secret,” then it brings a case “both too vague and too inclusive,” and does not allow a jury to
“separate the trade secrets from the other information that goes into any” product in the field.
IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 583–84 (7th Cir. 2002) (applying the
Wisconsin Uniform Trade Secrets Act).
In cases involving a combination trade secret based on technical information, like the
current appeal, the reasonable-particularity requirement takes on special importance. A
combination-trade-secret plaintiff must “describe the secret with sufficient specificity that its
protectability can be assessed and to show that its compilation is unique.” Sit-Up Ltd., 2008 WL
463884, at *10. And a plaintiff asserting a combination trade secret over highly complex
technical information cannot merely offer “lists of broad technical concepts . . . ‘identif[ying]
categories of information’” without showing which information contained within those
categories constituted a trade secret. Calendar Rsch. LLC v. StubHub, Inc., No. 2:17-cv-04062,
2020 WL 4390391, at *7 (C.D. Cal. May 13, 2020) (quoting Loop AI Labs Inc. v. Gatti, 195 F.
Supp. 3d 1107, 1116 (N.D. Cal. 2016)).2
“Whether a particular type of information constitutes a trade secret is a question of fact.”
Alph C. Kaufman, 540 S.W.3d at 818 (quoting Fastenal Co. v. Crawford, 609 F. Supp. 2d 650,
672 (E.D. Ky. 2009)). Substantial evidence presented at trial showed that Caudill’s research-
and-development efforts constituted a protectable combination trade secret: Caudill repeatedly
demonstrated that it had assembled a unique combination of processes and information that aided
its research and development processes at a level of depth beyond merely listing technical
concepts. To give some examples:
• One witness who had worked with Ashurst at Caudill testified that Ashurst
“seemed, in my experience, to understand the whole process. It was a
compilation of discoveries they had made before, and he was working with
previous discoveries by Caudill to work on new projects.”
2
Calendar Research arises under the federal Defend Trade Secrets Act, but “Kentucky’s trade secret
protection statute is nearly identical to the DTSA.” C-Ville Fabricating, Inc. v. Tarter, No. 5:18-cv-379, 2019 WL
1368621, at *14 (E.D. Ky. Mar. 26, 2019).
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• Ashurst “assembled that very large collection of information in the course of
[his] work for Caudill Seed Company,” “probably” “curated that compilation
of information,” and “read those articles in the course of [his] work for
Caudill Seed Company.”
• Caudill extensively tested the microbial contents of both its products and its
competitors’, which a witness agreed gave Caudill a competitive advantage
and provided Caudill with important information related to product quality.
• Caudill had a collection of documents that showed “the process from the seed
all the way to the making of BroccoRaphanin,” and this data would have
saved industry employers “time and money had [they] had that document in
[their] possession after May 2, 2011.”
We therefore agree with the district court that Caudill sufficiently defined Trade Secret 1
at trial, as the work that Caudill had performed before Ashurst arrived, the specific work that
Ashurst performed while at Caudill, and the “body of knowledge” that Ashurst subsequently
took to Jarrow. “The jury agreed,” and “[e]vidence presented at trial supports the jury’s
finding.” Alph C. Kaufman, 540 S.W.3d at 818.
Jarrow then tries another angle, arguing that Caudill repeatedly shifted its level of
generality at trial, defining different aspects of the secret as public or confidential based on the
argument that Caudill sought to present. For example, Jarrow contends that a Caudill witness
vacillated on whether Trade Secret 1 contained confidential material or was composed entirely of
public information. We disagree. For instance, one Caudill executive constantly reiterated over
almost 100 pages of testimony that Caudill’s trade secret is in the entire research-and-
development process, even though many of the individual steps may be in the public domain.
The jury could credit this and similar testimony to understand Trade Secret 1 as containing all of
Caudill’s process, regardless of Jarrow’s contentions that Caudill concealed Trade Secret 1’s true
definition. Jarrow’s argument, therefore, does not convince us that Caudill failed to define its
trade secret properly.
Failing to provide a convincing legal argument, Jarrow turns to policy. Policy concerns
about employee mobility loom in the background when assessing trade-secret claims based on
information derived from departing employees. There is a “long-standing tension between
employment law and the trade secrets doctrine[,]” and to avoid an anticompetitive effect, “a
party seeking to protect trade secrets [must] describe the subject matter of the trade secret with
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sufficient particularity to separate it from matters of general knowledge in the trade or of special
knowledge of those persons who are skilled in the trade.” Calendar Rsch. LLC, 2020 WL
4390391, at *5 (quoting Mattel, Inc. v. MGA Entm’t, Inc., 782 F. Supp. 2d 911, 967 (C.D. Cal.
2011)). And when trade secrets consist of incremental advances in a highly specialized technical
field, “a more exacting level of particularity may be required to distinguish the alleged trade
secrets from matters already known to persons skilled in that field.” Id. (quoting Loop AI Labs,
195 F. Supp. 3d at 1115); Restatement (Third) of Unfair Competition § 39 Reporter’s note to
cmt. d (Am. L. Inst. 1995) (“For example, to protect the ability of former employees to utilize
their general knowledge and skill, a court may impose a rigorous burden on the former employer
to define the precise contours of the claimed trade secret.” (citation omitted)). According to
Jarrow, Caudill’s suit undermines this policy.
As a general matter, Kentucky law supports Jarrow. Kentucky law has long recognized
an employee’s “right to take with him all the skill he has acquired” when moving between
employers. Birn v. Runion, 222 S.W.2d 657, 659 (Ky. 1949) (quoting Garst v. Scott, 220 P. 277,
278 (Kan. 1923)). Kentucky’s highest court has held that “[a]ll [of an employee’s] knowledge,
skill and information, except trade secrets, become a part of his equipment for the transaction of
any business in which he may engage, just the same as any part of the skill, knowledge,
information or education that was received by him before entering upon the employment.”
Progress Laundry Co. v. Hamilton, 270 S.W. 834, 836 (Ky. 1925) (quoting Garst, 220 P. at
278). If Caudill’s case rested on the fact that Ashurst joined Jarrow, then this argument might be
convincing.
Ashurst, however, did more than simply move companies. Ashurst sent Caudill
documents to Jarrow, produced an outline for Jarrow recreating Caudill’s research strategy, and
prompted Jarrow to “lay on some BS” to ensure that Caudill did not catch wise to Jarrow’s
machinations, In other words, he provided Jarrow with the results of years of research, testing,
and analysis that informed Caudill’s production process. Similar behavior has supported courts
imposing trade-secret liability in the past. Fastenal, 609 F. Supp. 2d at 672. We reject Jarrow’s
employee-mobility argument.
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Jarrow argued that Caudill improperly defined its trade secret in three ways: by showing
insufficient particularity, by presenting a constantly shifting trade secret, and by defining the
trade secret in such a way as to impose on free labor movement. Because “the jury’s verdict is
[not] so flagrantly against the weight of the evidence as to indicate passion or prejudice,” Alph C.
Kaufman, 540 S.W.3d at 819 (quoting Consol. Infrastructure Mgmt. Auth., Inc. v. Allen, 269
S.W.3d 852, 856 (Ky. 2008)), and because the district court did not rely on clearly erroneous
facts in reaching this conclusion, we reject all three of Jarrow’s arguments and uphold the jury’s
conclusion that Caudill properly defined Trade Secret 1.
2. Trade Secret 1 Is Not Improperly Composed of Public Information
In addition to arguing that Caudill did not sufficiently define Trade Secret 1, Jarrow
advances the separate but related argument that much of Trade Secret 1 comes from the public
domain. This is another important feature in trade-secret law: as discussed above, trade secrets
must not be “readily ascertainable by proper means.” Ky. Rev. Stat. § 365.880(4)(a). Under
Kentucky law, “[i]nformation cannot constitute a trade secret and, thus, is not confidential if the
subject matter is ‘of public knowledge or general knowledge in the industry’ or if the matter
consists of ‘ideas which are well known or easily ascertainable.’” Insight Ky. Partners II, L.P. v.
Preferred Auto. Servs., Inc., 514 S.W.3d 537, 555 (Ky. Ct. App. 2016) (quoting Heyer-Jordan &
Assocs., Inc. v. Jordan, 901 S.W.2d 814, 821 (Tenn. Ct. App. 1990)).
Unfortunately, Kentucky law provides no further guidance on this point. For example,
Insight did not concern a combination trade secret, and we have located no cases evaluating
combination trade secrets under the KUTSA.3 Courts evaluating UTSA claims have split on the
question of whether combination trade secrets may consist entirely of public-domain materials.
3
We have found only two cases that even come close. Before the KUTSA’s adoption, Kentucky’s highest
court suggested that elements known to an industry could not combine to produce a trade secret. Mid-States Enters.,
Inc. v. House, 403 S.W.2d 48, 50 (Ky. 1966) (“[T]here could be no novelty or uniquen[]ess about the components of
a device if they are known to others.”). But the court made that observation to dispatch the plaintiff’s argument that
application of a well-known design to a new industry was a protectable trade secret. Additionally, in an unpublished
post-KUTSA case concerning disclosure of trade secrets during discovery, the Kentucky Supreme Court dismissed
the plaintiff’s argument that “a compilation of information that would allow an unfair economic advantage to others
if disclosed” could receive trade-secret protection if it “would provide meaningful confidential information to the
detriment of” the plaintiff. Ky. Farm Bureau Mut. Ins. Co. v. Hopper, No. 2002-SC-0774, 2003 WL 22415748, at
*5 (Ky. Oct. 23, 2003). This case gives us little guidance because the putative trade secret there was really an
internal corporate self-assessment.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 14
Compare Mike’s Train House, 472 F.3d at 411, and 3M, 259 F.3d at 595–96 (stating that they
may), with Olaplex, Inc. v. L’Oréal USA, Inc., 855 F. App’x 701, 710–11 (Fed. Cir. 2021)
(faulting the plaintiff for (a) not proving use and (b) failing to define the “testing and know how
and “dead ends and trials and errors” trade secrets with specificity).
We need not choose a side in this split because Jarrow does not assert that Trade Secret 1
consists entirely of public-domain materials. Jarrow instead argues that “so much of Caudill’s
purported ‘seed to shelf’ process was generally known in the industry and readily ascertained by
persons (like Ashurst) who are skilled in the trade.” But the fact that “much of” the Caudill
process was known to the industry, even if true, does not matter, because it means that some of
the process that Ashurst brought to Jarrow was not known to the industry. See Chemetall GmbH
v. ZR Energy, Inc., No. 99 C 4334, 2001 WL 1104604, at *6 (N.D. Ill. Sept. 18, 2001) (mem.)
(“Thus, the defendants’ argument that ‘much’ of plaintiff’s ZMP process is in the public domain
is a non-starter, because ‘much’ is not all.” (citation omitted)). As a result, Jarrow cannot
establish that Caudill impermissibly relied on solely public-domain materials to establish Trade
Secret 1.
B. Caudill Proved that Jarrow Acquired and Used All of Trade Secret 1
Jarrow separately argues that even if Caudill permissibly defined Trade Secret 1, Caudill
never satisfied the legal requirement of showing that Jarrow acquired and used the entire
combination trade secret. Jarrow explains that if this requirement is not enforced, a defendant
could be liable for acquiring or using only a component of a combination trade secret that is
readily discernible from general industry knowledge. Caudill disputes that trade-secret law
imposes such a requirement. We agree with Caudill.
The parties dispute a legal issue: whether trade-secret law requires a plaintiff to show
acquisition and use of the entirety of a combination trade secret. We therefore undertake de
novo review of this legal claim. Hanover Am. Ins. Co. v. Tattooed Millionaire Ent., Inc., 974
F.3d 767, 779 (6th Cir. 2020).
Authorities disagree as to whether a combination-trade-secret plaintiff must show
acquisition and use of the entire combination. One line of thinking, expressed in the Restatement
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 15
of Unfair Competition, explains that a trade secret’s “unauthorized use need not extend to every
aspect or feature of the trade secret; use of any substantial portion of the secret is sufficient to
subject the actor to liability.” Restatement (Third) of Unfair Competition § 40 cmt. c (Am. L.
Inst. 1995). “[T]raditional trade secret law” recognizes that “the user of another’s trade secret is
liable even if he uses it with modifications or improvements upon it effected by his own efforts,
so long as the substance of the process used by the actor is derived from the other’s secret.”
Mangren Rsch. & Dev. Corp. v. Nat’l Chem. Co., 87 F.3d 937, 944 (7th Cir. 1996) (quoting In re
Innovative Constr. Sys., Inc., 793 F.2d 875, 887 (7th Cir.1986)).4 This tradition has a solid
foundation: if a trade secret misappropriator could avoid liability by changing a few details in
their final product, “the protections that law provides would be hollow indeed.” Id.But that does not tell the whole story. Several courts have concluded that a trade-secrets
plaintiff cannot prove the use of a combination trade secret unless that plaintiff “prove[s] use of
each and every element in combination.” Vital State Can., Ltd. v. DreamPak, LLC, 303 F. Supp.
2d 516, 529 (D.N.J. 2003). For instance, in GSI Technology, Inc. v. United Memories, Inc.,
California’s Northern District concluded that it would be “overbroad and incorrect” to impose
liability based on partial use of a combination trade secret, because doing so could create liability
for a firm that “misappropriate[ed]” a portion of a combination trade secret containing either its
own intellectual property or publicly available information. No. 5:13-cv-01081, 2016 WL
3035699, at *6 (N.D. Cal. May 26, 2016). And in American Airlines, Inc. v. KLM Royal Dutch
Airlines, Inc., the Eighth Circuit spoke to the requirement of showing acquisition of an entire
combination, holding that a plaintiff’s combination-trade-secret case could not survive summary
judgment because “American’s expert testified that the specific combination of all five elements
constituted a trade secret,” but “[i]t is undisputed that KLM never received all five elements.”
114 F.3d 108, 111–12 (8th Cir. 1997).
Jarrow highlights this latter line of authorities to argue that Caudill never showed that
Jarrow acquired every piece of information that could constitute a part of Caudill’s research-and-
development process. Jarrow also presents several differences between the firms’ manufacturing
processes, implying that it did not use the entirety of Trade Secret 1. Unfortunately for interested
4
Mangren did not concern a combination trade secret.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 16
readers and industry spies, we will decline to summarize those differences so as to protect the
parties’ secrets. Caudill disputes the differences between the firms’ products, but more
importantly explains that the evidence at trial demonstrated that Jarrow acquired and used
Caudill’s entire process, regardless of what portion of the process made it into Jarrow’s final
product.
We begin by considering—and rejecting—Jarrow’s argument that trade-secrets law
requires showing acquisition of each atom of a combination trade secret. First, we disagree that
such a requirement necessarily exists: Jarrow presents no in-circuit case, and no principle of
Kentucky law, that would support such a requirement for combination-trade-secrets plaintiffs.
Second, as the district court recognized, even if such a requirement existed, it would make a
good deal of sense to relax it in combination-trade-secrets case like this one, in which the
acquired trade secret comprised a party’s entire research process. That is because when a trade
secret consists of a mass of public information that has been collected and sorted, it will always
be possible to identify increasingly minute details of the combination that a plaintiff would need
to show were specifically misappropriated. See GlobeRanger Corp. v. Software AG USA, Inc.,
No. 3:11-cv-0403, 2015 WL 3648577, at *12–13 (N.D. Tex. June 11, 2015). Jarrow cannot
avoid liability in this fashion. The evidence at trial showed that Jarrow, through Ashurst,
received vast quantities of information concerning Caudill’s research-and-development process.
We affirm the district court’s denial of Jarrow’s post-trial motions on this ground.
Jarrow fares no better as to the purported requirement that a combination-trade-secrets
plaintiff show use of the entire combination. Trade-secrets law does not demand a mirror-image
between the misappropriated secrets and the eventual product derived from them. Restatement
(Third) of Unfair Competition § 40 cmt. c (Am. L. Inst. 1995); GlobeRanger Corp., 2015 WL
3648577, at *13; cf. Avery Dennison Corp. v. Four Pillars Enter. Co., 45 F. App’x 479, 487 (6th
Cir. 2002) (per curiam). We see no reason not to apply this general principle to combination
trade secrets: when the law grants protection over many interconnected pieces of information, an
even-higher threat exists of a misappropriating party changing one element of the combination to
evade liability. Holding otherwise would produce bizarre outcomes: a trade-secret thief could
misappropriate a research process, design a competing product in far less time than it would have
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 17
otherwise taken, and avoid liability because it did not debut the same product as its victim-
competitor. See 3M, 259 F.3d at 596. We similarly affirm the dismissal of Jarrow’s post-trial
motions on this ground.
C. The District Court Properly Calculated Damages
Jarrow next faults the district court for improperly awarding damages. We disagree.
Caudill claimed entitlement to just under $10 million in damages. This included a
request for $4,535,793 in research-and-development costs, about $2,000,000 of which was
incurred in the 2002–2011 period that Ashurst worked for Caudill. Caudill’s expert testified that
Caudill was entitled to unjust enrichment damages, estimating Jarrow’s profits from 2011-2019
on various Jarrow products. Caudill’s expert based his damage predictions on the jury finding
Jarrow liable on all six trade secrets.
The jury awarded Caudill $2,023,000 in actual losses and $404,605 in unjust enrichment.
The jury did not calculate these numbers randomly. Instead, for actual losses, the jury calculated
Caudill’s research-and-development costs spanning the approximately eight years and four
months for which Ashurst worked for Caudill. The unjust-enrichment amount represents
Jarrow’s profits relating to the four relevant products “from May 2011 through the end of 2017.”
The district court upheld this award against Jarrow’s motion for judgment as a matter of
law or motion for a new trial. The district court stressed that Caudill received only a portion of
the damages that it sought, even considering the jury’s verdict that Jarrow misappropriated four
Caudill trade secrets.
Jarrow makes three arguments on appeal. Jarrow claims that the damages award was
calculated improperly based on the damages expert’s consideration of all six asserted trade
secrets, even though Caudill recovered damages on only Trade Secret 1; Jarrow argues that the
$2,023,000 compensatory-damages award cannot stand because the trade secret was not
published or destroyed, and puts forward a blunderbuss of other reasons why compensatory
damages were improperly calculated; and Jarrow asserts that the unjust-enrichment award is
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 18
insufficiently tied to the damages that Caudill proved at trial. But first, we again must determine
whether Jarrow forfeited this argument, and what the applicable standard of review is.
Caudill asserts that Jarrow forfeited its damages arguments by failing to object to the
damages award at the close of trial. This is incorrect. A party can preserve a challenge to a
damages award by presenting the issue to the district court in a post-trial motion. Roush v. KFC
Nat’l Mgmt. Co., 10 F.3d 392, 397 (6th Cir. 1993). Because Jarrow’s motion for judgment as a
matter of law devoted nearly half of its pages to damages issues, it did not forfeit this argument.
Regarding the standard of review, the parties agree that Jarrow appeals the denial of its
Rule 50 motion. Because this is a diversity case in which Jarrow challenges the sufficiency of
the evidence, we therefore apply Kentucky’s standard for Rule 50 motions, which holds that
judgment as a matter of law “is only appropriate when ‘there is a complete absence of proof on a
material issue or if no disputed issues of fact exist upon which reasonable minds could differ.’”
Alph C. Kaufman, 540 S.W.3d at 817–18 (quoting Toler, 458 S.W.3d at 285); see also Bierman
v. Klapheke, 967 S.W.2d 16, 18–19 (Ky. 1998).
1. The Evidence Supports the Jury’s Compensatory-Damages Verdict
Jarrow first argues that Caudill did not introduce sufficient evidence attributing its
compensatory damages to Trade Secret 1. Jarrow makes this argument in two separate ways: by
arguing that the compensatory damages award was against the sufficiency of the evidence, and
by explaining that the compensatory damages cannot be tied specifically to Trade Secret 1.
Each trade secrets “case requires a flexible and imaginative approach to the problem of
damages.” Melvin F. Jager, 1 Trade Secrets Law § 7:20 (Oct. 2021) (quoting Univ. Computing
Co. v. Lykes-Youngstown Corp., 504 F.2d 518, 538 (5th Cir. 1974)). This flexibility means that
“the plaintiff is required to prove the amount of such loss with only as much certainty as is
reasonable under the circumstances.” Restatement (Third) of Unfair Competition § 45 cmt. b
(Am. L. Inst. 1995). “Damages in trade secrets cases are difficult to calculate . . . . When the
misappropriated trade secret is used to field competing products, the best measure of damages is
the plaintiff’s lost profits or the defendant’s illicit gains.” Acuity Brands Lighting, Inc. v.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 19
Bickley, No. 5:13-cv-366, 2015 WL 12976104, at *2 n.2 (E.D. Ky. June 8, 2015) (quoting Avery
Dennison Corp., 45 F. App’x at 485).
Jarrow tosses out many objections to the jury’s award of compensatory damages. It
asserts that Chief Operating Officer Dan Caudill’s testimony concerned some research and
development for products unrelated to glucoraphanin. This, Jarrow reasons, implies that Ashurst
worked on some research and development that did not concern glucoraphanin, meaning that the
jury should not have awarded Caudill all of its research-and-development costs over Ashurst’s
nine-year tenure. Jarrow also faults Caudill’s expert for pulling research-and-development
figures from Caudill’s consolidated tax returns without recognizing that Caudill has numerous
subsidiaries. Jarrow additionally complains that Trade Secret 1 did not embody the full
$2,023,000 of research-and-development costs awarded. Finally, Jarrow notes that because
Caudill disclosed some of its research-and-development information through publicly filed
patent applications in 2008 and 2009, Jarrow would not have needed to recreate all of Caudill’s
work, making the full research-and-development award improper.
The Rule 50 standard dooms these arguments. The record provides evidence that would
permit a jury to infer that the 2002–11 research-and-development costs reflected the damages
that Trade Secret 1’s misappropriation inflicted on Caudill. For example, Dan Caudill testified
that Ashurst’s research-and-development efforts concerned glucoraphanin, and that the goal of
this research was to develop a commercially successful glucoraphanin powder. Dan Caudill
performed this research “primarily with Ashurst,” and the duo’s work “took off on a path that no
one else was working on.” Caudill’s damages expert, on cross-examination, specifically
confirmed that the company’s research-and-development expenses related to broccoli seeds.
As to the reliance on consolidated tax returns, courts have concluded that tax returns are
valid evidence in calculating trade-secrets damages. See Hirtle Callaghan Holdings v.
Thompson, No. 2:18-cv-2322, 2021 WL 1163739, at *5 (E.D. Pa. Mar. 26, 2021). Jarrow was
certainly welcome to argue to the jury that consolidated tax returns could not provide a basis on
which to award damages, but Caudill presented more than a “complete absence of proof” by
providing them.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 20
Jarrow’s argument about Caudill’s purported failure to link research-and-development
costs to Trade Secret 1 fares no better. Jarrow claims that because the jury found no
misappropriation of the tangible Trade Secrets 2 or 6, the jury could not have awarded the full
amount of research-and-development costs based on the intangible Trade Secret 1. Jarrow cites
no precedent for this proposition and cannot satisfy Kentucky’s stringent standard for sufficiency
challenges.
Finally, Jarrow’s argument about Caudill’s research and development existing in the
public domain also fails. First, as catalogued above, combination trade secrets can consist of
public information. Second, and more importantly, Jarrow fails to persuade us that this argument
satisfies (or even approaches) Kentucky’s sufficiency-of-the-evidence standard.
In sum, Jarrow’s sufficiency-of-the-evidence arguments on damages lose less on their
content and more on their procedural posture. As Caudill’s expert explained, Caudill provided
evidence that its research-and-development expenses related to broccoli seeds, “[a]nd if there’s
evidence that sways the jury the other way, then” the jury would be free to decide differently.
Jarrow indeed tried to “sway[] the jury the other way”: the damages issue was the first issue that
Jarrow pressed in closing, with Jarrow’s attorney highlighting the importance of the damages
argument by noting that he had not in thirty-one years of practice begun a closing argument by
discussing damages. One element of damages that Jarrow stressed was the “illogical claim” that
Caudill’s research-and-development costs all went towards the alleged trade secrets. The jury
rejected Jarrow’s argument and embraced Caudill’s, and we will not disturb its decision.
2. Jarrow’s Challenge to Caudill’s Expert’s Testimony in Light of the Jury
Verdict Also Fails
Jarrow separately argues that Caudill’s damages award fails as a matter of law because it
relies on expert testimony undermined by the jury’s verdict. At trial, Caudill’s expert assumed
as part of his analysis that Caudill would recover on all six alleged trade secrets, conceding that
there would be an “impact [on] the analysis” if the jury found no liability on Trade Secret 2. The
jury then found no misappropriation of Trade Secrets 2 or 6. Jarrow thus argues that the jury
could not have given Caudill the full recovery that it sought for Trade Secret 1. The parties
again provide no standard of review, but it appears that this is a legal issue that we review de
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 21
novo as to Jarrow’s Rule 50 motion. Hanover Am. Ins. Co., 974 F.3d at 779. To the extent that
Jarrow intends to challenge the district court’s denial of its Rule 59 motion, we apply abuse-of-
discretion review. Broad St. Energy Co., 806 F.3d at 405–06.
Jarrow supports its argument with two out-of-circuit cases in which courts found that an
expert’s reliance on trade secrets that were not misappropriated doomed a damages award:
Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., and O2
Micro International Ltd. v. Monolithic Power Systems, Inc. Neither of these cases dictates
Jarrow’s conclusion.
In Texas Advanced Optoelectronic Solutions, a jury found the defendant liable on
multiple grounds, but an appellate panel vacated some grounds for liability, leaving only one
remaining. 895 F.3d 1304, 1311–15 (Fed. Cir. 2018). Turning to the damages award, the court
concluded that because the plaintiff’s expert “did not distinguish among” the multiple grounds,
and because two of the three grounds had been vacated, the damages award needed to be vacated
as well. Id. at 1317. This was because the expert “did not explain which of the trade secrets
contributed to what amount of profit to be disgorged; he assigned all profits to the
misappropriation of all trade secrets.” Id.Texas Advanced Optoelectronic’s reasoning does not call for reversal here. There, the
jury awarded the full amount of requested trade-secrets damages. Id. at 1328. First, in Texas
Advanced Optoelectronic, the appellate court reversed the district court in part, concluding that
two of the three secrets did not qualify for protection. Id. at 1317. We, by contrast, affirm the
district court’s decision as to Trade Secret 1’s protectability, and thus have no reason to go down
Texas Advanced Optoelectronic’s path. More importantly, the jury here awarded far less than
the total amount requested. Texas Advanced Optoelectronic’s fears of a court having “no basis
to conclude” that the relevant ground for liability “supports the entire award” thus are unavailing,
because the jury did not award the “entirety” of Caudill’s damages. 895 F.3d at 1317. Indeed,
the jury appeared to heed Caudill’s expert’s claim that a finding of no misappropriation of
Caudill’s other trade secrets would affect the damages calculation by awarding reduced damages.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 22
In O2, the plaintiff’s damages expert testified that the theft of eleven trade secrets
unjustly enriched the defendant by $16 million. O2 Micro Int’l Ltd. v. Monolithic Power Sys.,
Inc., 399 F. Supp. 2d 1064, 1076 (N.D. Cal. 2005). The jury found that the misappropriation of
only one trade secret resulted in the defendant being unjustly enriched and awarded $12 million
in damages. Id. The district court recognized that damages must be calculated flexibly but
struck the expert’s testimony because it no longer provided a “reasonable basis” to support a jury
award. Id. Because the jury had been “left without sufficient evidence, or a reasonable basis, to
determine the unjust enrichment damages . . . the jury’s award of unjust enrichment damages was
based on speculation and guesswork, not on evidence.” Id. at 1077. The court granted the
defendant’s motion for judgment as a matter of law. Id.O2 is not as persuasive as Jarrow thinks. The plaintiff’s damages expert there took an
all-or-nothing approach: his model turned on misappropriation of all the trade secrets without
offering the jury a way to attribute value to each individual trade secret. Id. at 1076. But
Caudill’s expert gave the jury options. As explained above, although Caudill’s expert’s damages
model assumed misappropriation of all six trade secrets, he testified that all of Caudill’s research
and development expenses went to broccoli seed research. That allowed the jury to calculate the
value of Trade Secret 1 even while finding no misappropriation of Trade Secrets 2 and 6. Jarrow
has presented no evidence convincing us that Kentucky’s Supreme Court would take a more
narrow view of the evidence that can support a trade-secrets damages award, and so we will
adhere to the broader view that a court may flexibly award trade-secrets damages. See Melvin F.
Jager, 1 Trade Secrets Law § 7:20 (Oct. 2021); Acuity Brands Lighting, Inc., 2015 WL
12976104, at *2 n.2.
Jarrow also finds no refuge in Kentucky law. In Insight Kentucky Partners, a trade-
secret case that also included a tortious-interference claim, plaintiff’s damages expert included
money spent at different vendors than the one involved in the litigation. 514 S.W.3d at 553. The
Kentucky Court of Appeals ruled that, because the testimony provided no “causal link” between
those expenses and the damages relevant to this case, the damages award had to be vacated. Id.Otherwise, the plaintiff could have collected “damages that had no relationship to the claims
asserted by” the plaintiff. Id. But the portion of Insight concerning damages calculations does
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 23
not refer to the trade-secrets claim, because the court ruled that the underlying information was
not a trade secret. Id. at 554–55. As a result, we cannot conclude that Kentucky’s courts would
import Insight’s rigid reasoning into the malleable context of trade secrets. The district court
properly rejected Jarrow’s argument on this point.
3. The Award of Research-and-Development Costs Was Not Legally Defective
Jarrow next argues that Caudill cannot collect research-and-developments costs from the
time that Ashurst worked at Caudill because those costs may be awarded only when the
underlying secret is destroyed (which didn’t happen here). This is also a legal issue that we
review de novo as to Jarrow’s Rule 50 challenge and for abuse of discretion as to its Rule 59
motion. See Hanover Am. Ins. Co., 974 F.3d at 779 (Rule 50); Broad St. Energy Co., 806 F.3d at
405–06 (Rule 59).
Jarrow is right that actual loss to the plaintiff is one way to measure damages. “[T]his is
an appropriate measure of damages only when the defendant has in some way destroyed the
value of the secret.” Univ. Computing, 504 F.2d at 535. “Where the plaintiff retains the use of
the secret, as here, and where there has been no effective disclosure of the secret through
publication, the total value of the secret to the plaintiff is an inappropriate measure.” Id.(emphasis added).
But actual loss to the plaintiff is not the only method of calculating damages in trade
secret theft cases. Courts, including our own, utilize several other measures of monetary relief.
See Mid-Michigan Computer Sys., Inc. v. Marc Glassman, Inc., 416 F.3d 505, 510 (6th Cir.
2013); Avery Dennison, 45 F. App’x at 485; Wellogix v. Accenture, L.L.P., 716 F.3d 867, 879
(5th Cir. 2013); Univ. Computing, 504 F.2d at 535–38; see also Restatement (Third) of Unfair
Competition § 45 cmt. d (listing “four methods of measuring monetary relief in trade secret
cases”).
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 24
One of those options is the “measure of the value of the secret to the defendant.” Univ.
Computing, 504 F.2d at 536.5 “This is usually the accepted approach where the secret has not
been destroyed and where the plaintiff is unable to provide specific injury.” Id. Thus, the
appropriate measure of damages “is not what the plaintiff lost, but rather the benefits, profits, or
advantages gained by the defendant in the use of the trade secret.” Id. (cleaned up). We adopted
this measure of damages in Avery Dennison, adding that “[i]f the benefit to the defendant in
terms of direct profits is not ascertainable, damages may be awarded based on the value to the
defendant of the secret at the time of misappropriation, the value derived from savings because
of increased productivity, or the value derived from savings in research costs.” Avery Dennison,
45 F. App’x at 486 (emphasis added).6
Courts, including this one, have emphasized that “every case requires a flexible and
imaginative approach to the problem of damages,” and is ‘controlled by its own peculiar facts
and circumstances.’” Univ. Computing, 504 F.2d at 538 (quoting Enter. Mfg. Co. v. Shakespeare
Co., 141 F.2d 916, 920 (6th Cir. 1944)). With this caveat: “Pecuniary loss in any event can be
determined only by reasonable approximation. The actual value of what has been appropriated is
always the ultimate in appraisement.” Enter. Mfg., 141 F.2d at 920.
Take University Computing, which mirrors this case in some ways. There the defendants
misappropriated a retail inventory control system owned by the plaintiff and marketed it to
competitors. The Fifth Circuit explained:
In the type of case which we now consider, when the parties were potentially in
direct competition and the course of conduct of the defendant extended over a
period of time and included a number of different uses of the plaintiff’s trade
secret, and where the process of developing a computer system was very difficult
5
University Computing noted that this second approach to measuring the value of the trade secret to the
defendant has “many variations,” including a “reasonable royalty” standard and its subsidiary “standard of
comparison method.” 504 F.2d at 538.
6
The defendant-misappropriator in Avery Dennison “did not use the stolen trade secrets to bring directly
competing products to market. Rather it used the [plaintiff-manufacturer of pressure-sensitive adhesive labels’]
secrets to create a panoply of new products, save significantly on time and resources devoted to research, and
streamline their manufacturing processes.” 45 F. Appx at 486; see also id. at 482. The plaintiff’s damages expert
presented three theories of damages, all aimed at the ill-gotten benefits to the defendant: reasonable royalty, the
defendant’s profits, and avoided costs. Id. at 486. We held the district court’s decision to allow the expert’s
testimony was within its discretion because the “theories were sufficiently factually supported.” Id. at 487.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 25
and required substantial technical and theoretical advances, we believe a broader
measure of damages is needed.
Univ. Computing, 504 F.2d at 538. That “broader measure” included factors in addition to
development costs. Id. Based on this flexible and comprehensive approach, the Fifth Circuit
affirmed the district court’s instructions to the jury that it could consider the plaintiff’s
development costs and the defendant’s sales, among other factors. Id. at 539–40.
Here the jury was instructed that if it found that Jarrow misappropriated Trade Secret 1,
damages could “include both the actual loss caused by the misappropriation and unjust
enrichment caused by misappropriation that is not taken into account in computing actual loss.”
The monetary value for unjust enrichment included “the profits that Jarrow Formulas derived
from the sales of products utilizing such Caudill trade secret or secrets and the value gained or
money saved by Jarrow Formulas by not having to expend resources on research and
development.” The jury was admonished not to double count any damages, and to limit the
recovery period to “the time it would have taken Jarrow Formulas to obtain the information by
proper means.”
The jury instructions in this case were not only in-sync with the “benefit-to-defendant”
method of damage calculation laid out in Mid-Michigan Computer and Avery Dennison but were
also fine-tuned to the unique facts of this case, per University Computing and Enterprise
Manufacturing’s instruction. And the jury obviously got the message: it did not award Caudill
all of its requested research-and-development costs. As the district court held in its ruling on
Jarrow’s motion for judgment as a matter of law, “[t]he jury’s verdicts . . . indicate[d] that it
found Caudill Seed’s evidence established that Jarrow Formulas’ misappropriation of Caudill
Seed’s research and development ‘seed to shelf’ only had compensable value insofar as it
enabled Jarrow Formulas to become a broccoli seed extract manufacturer and developer of a
successful activated formula broccoli seed product in four months.” This meant that Caudill
“was thus entitled to a portion of the damages claimed which the jury determined from the
evidence represented the value gained or money saved by Jarrow Formulas by not having to
expend resources on research and development and the profits Jarrow Formulas derived from
sales of products achieved through that jump start afforded to Jarrow Formulas.”
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 26
In sum: the jury was properly instructed on the appropriate legal theory of compensatory
damages.
4. The Unjust-Enrichment Award Has a Proper Basis
Jarrow next argues that the award of unjust-enrichment damages rested upon an improper
basis. We disagree.
In trade-secrets cases, “[d]amages may include both the actual loss caused by
misappropriation and the unjust enrichment caused by misappropriation that is not taken into
account in computing actual loss.” Ky. Rev. Stat. § 365.884(1). Some courts in trade-secrets
cases permit plaintiffs to pursue both compensatory and restitutionary damages, “provided that
there is no double recovery.” Restatement (Third) of Unfair Competition § 45 cmt. c (Am. L.
Inst. 1995). The jury awarded Caudill $404,605 in unjust-enrichment damages.7 This amount
apparently came from Caudill’s damages expert’s calculation of the net profits on four Jarrow
products that contained either glucoraphanin or activated glucoraphanin. The district court
concluded that a jury faced with Caudill’s evidence could conclude that Jarrow gained a
substantial competitive advantage from its misappropriation and could award damages
accordingly.
On appeal, Jarrow raises a series of arguments challenging the sufficiency of the evidence
supporting the unjust-enrichment award, all stemming from the proposition that a jury must
allocate recovery for unjust-enrichment damages “based on the role plaintiff’s trade secret played
in the commercial success of defendant[’s] product.” Softel, Inc. v. Dragon Med. & Sci.
Commc’s, Ltd., 891 F. Supp. 935, 943 (S.D.N.Y. 1995). Because we once again evaluate a
sufficiency-of-the-evidence claim in a diversity case, we apply Kentucky’s standard, which asks
us to determine whether a “complete absence of proof” exists as to the damages issue. Here,
Caudill presented sufficient proof.
First, Jarrow argues that Caudill presented “no evidence sufficiently tying all of the
products at issue to Trade Secret 1.” Three of the four products used only glucoraphanin, a
7
The verdict form awards $404,605 in unjust-enrichment damages. The district court’s opinion denying
Jarrow’s post-trial motions incorrectly stated that the jury awarded $404,603 in unjust-enrichment damages.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 27
commercially available product that Jarrow could have procured from other suppliers (the fourth
product used myrosinase-activated broccoli material). In response, Caudill explains, and we
agree, that although Jarrow could have purchased glucoraphanin elsewhere, Caudill alleged that
Jarrow used Caudill’s proprietary process to produce glucoraphanin in-house. See Imperial
Chem. Indus. Ltd. v. Nat’l Distillers & Chem. Corp., 342 F.2d 737, 743 (2d Cir. 1965). Jarrow
tries to make hay of the expert’s reliance on products containing glucoraphanin, but the jury was
instructed that Trade Secret 1 includes research and development related to glucoraphanin.
Second, Jarrow again asserts that Caudill’s damages expert assumed Caudill would
successfully prove misappropriation of all six trade secrets, which it failed to do. As discussed
supra, we see no mismatch between the expert’s testimony and the ultimate damages award, and
so we decline to adopt Jarrow’s argument.
Third, Jarrow claims that even if the unjust-enrichment award can partially stand, Caudill
did not present evidence showing that Jarrow should have to disgorge “all profits over a six-year
period.” This is because Jarrow already manufactured broccoli-based products before Ashurst
joined the company. But Caudill demonstrates that the jury instructions allowed the jury to
award damages for an additional period if the jury believed that Jarrow “retained an advantage
over good faith competitors because of the misappropriation.”
Because Jarrow cannot show a “complete absence of material proof” on these issues, we
reject Jarrow’s argument. The trial featured much discussion of glucoraphanin’s value. See,
e.g., R. 438 (Trial Tr. 2 at 11:9–21) (Page ID #19906); R. 452 (Trial Tr. 3-B at 10:4–17) (Page
ID #20671); R. 458 (Trial Tr. 13 at 40:25–42:6) (Page ID #21296–98); R. 470 (Trial Tr. 15-B at
8:2–9) (Page ID #21718). Caudill explained to the jury that Jarrow had profited for several years
because of its misappropriation of Caudill’s trade secrets, and that the jury could award unjust-
enrichment damages on that basis. Id. at 58:22–60:8. We affirm the district court’s denial of
Jarrow’s post-trial motion as to the unjust-enrichment damages.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 28
5. The Award of Exemplary Damages Need Not Be Reconsidered
At trial, the jury found that Jarrow willfully and maliciously misappropriated Trade
Secret 1. This finding was proper. And based on that finding, the court awarded $1,000,000 in
exemplary damages and $3,254,303.50 in attorney fees. Those awards were also proper.
a. Sufficient Evidence Supports the Jury’s Finding of Willful and
Malicious Misappropriation
The KUTSA authorizes exemplary damages and reasonable attorney fees in a trade-
secrets case “[i]f willful and malicious misappropriation exists.” Ky. Rev. Stat. §§ 365.884(2),
365.886. The parties agreed to jury instructions explaining that willful and malicious
misappropriation is “behavior motivated by spite or ill will and a disregard for the rights of
another with knowledge of probable injury.” The instructions explained that the relevant
motivation must come from employees and agents of Jarrow Formulas “other than Kean
Ashurst.” After Caudill received $1,000,000 in exemplary damages and $3,254,303.50 in
attorney fees, Jarrow moved for judgment as a matter of law, contending that Caudill should
have presented proof of actual malice, The district court denied the motion, applying what
Jarrow calls on appeal a “significantly lower standard” than that provided in the jury instructions.
Jarrow takes issue with the district court’s reference to a case in which “a breach of basic
commercial ethics and fraud” supported an award of exemplary damages. Jarrow thus appears to
argue that sufficient evidence does not support the correct, higher standard for exemplary
damages presented in the jury instructions.
Before proceeding to our analysis, we must for the final time determine the proper
standard of review. Because Jarrow argues that the evidence is insufficient to support the
verdict, and because we are reviewing a Rule 50 motion in a diversity case, we again apply
Kentucky’s standard, granting a directed verdict only if “there is a complete absence of proof on
a material issue or if no disputed issues of fact exist upon which reasonable minds could differ.”
Alph C. Kaufman, 540 S.W.3d at 817–18 (quoting Toler, 458 S.W.3d at 285).
To determine whether sufficient evidence supports the jury’s finding of “willful and
malicious” misappropriation, we must define the phrase “willful and malicious.” Unfortunately,
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 29
no Kentucky case defines willful and malicious conduct in the context of trade-secret
misappropriation. As a result, we must try to predict how Kentucky’s highest court would
distinguish ordinary trade-secrets cases from those in which a plaintiff can receive exemplary
damages. Brown Jug, Inc. v. Cincinnati Ins. Co., 27 F.4th 398, 402 (6th Cir. 2022).
Kentucky’s courts have looked to Black’s Law Dictionary when defining “willful and
malicious injury.” Huddleston ex rel. Lynch v. Hughes, 843 S.W.2d 901, 906 (Ky. Ct. App.
1992). That definition provides:
For such to exist there must be an intent to commit a wrong either through actual
malice or from which malice will be implied. Such an injury does not necessarily
involve hatred or ill will, as a state of mind, but arises from intentional wrong
committed without just cause or excuse. . . . It may involve merely a willful
disregard of what one knows to be his duty, an act which is against good morals
and wrongful in and of itself, and which necessarily causes injury and is done
intentionally.
Id. (quoting Willful and Malicious Injury, Black’s Law Dictionary (6th ed. 1990)) (emphasis
removed). And in Collins v. Rocky Knob Associates, Inc., the Kentucky Court of Appeals added
another layer, quoting the Supreme Court of Kentucky as defining “willful” to mean “conduct
which is still, at essence, negligent, rather than actually intended to do harm, but which is so far
from a proper state of mind that it is treated in many respects as if it were so intended.”
911 S.W.2d 608, 611 (Ky. Ct. App. 1995) (quoting Kirschner v. Louisville Gas & Elec. Co.,
743 S.W.2d 840, 842–43 (Ky. 1988)).
These definitions are an awkward fit for trade-secret law. Intentional misconduct
satisfies Kentucky’s general definition of “willful and malicious injury.” But to find liability in a
KUTSA case, a plaintiff must already establish intentional misappropriation. Ky. Rev. Stat.
§ 365.880(2). A plaintiff could thus argue that the court may award exemplary damages in every
KUTSA case: every businessperson presumably “knows [it] to be his duty” that he should not
steal a competitor’s trade secrets. Huddleston, 843 S.W.2d at 906 (quoting Willful and Malicious
Injury, Black’s Law Dictionary (6th ed. 1990)). That cannot be the case, however, because the
statute distinguishes between damages for “misappropriation” and damages for “willful and
malicious misappropriation.” Ky. Rev. Stat. § 365.884. And applying Kentucky law, “[o]ur
goal in construing each statute is to give effect to its plain meaning and unambiguous intent
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 30
without rendering any part meaningless.” A.H. v. Louisville Metro Gov’t, 612 S.W.3d 902, 908
(Ky. 2020).
We are caught somewhat between two principles: Kentucky’s definition of malice,
which would include all trade-secret cases, and Kentucky’s general rule that each provision of a
statute should be read to have independent effect. The parties’ agreed-upon jury instructions,
requiring, “behavior motivated by spite or ill will and a disregard for the rights of another with
knowledge of probable injury,” appears to us to navigate that divide. It distinguishes itself from
the language of Black’s Law Dictionary, under which an injury “does not necessarily involve
hatred or ill will, as a state of mind,” allowing for clearer application to trade-secrets cases.
Willful and Malicious Injury, Black’s Law Dictionary (6th ed. 1990). But it remains within the
spirit of Kentucky’s requirements for finding willful and malicious injury.
Measured against this standard, Caudill presented sufficient evidence at trial to allow a
jury to find willful and malicious misappropriation. A few notable anecdotes stand out:
• While Ashurst was working for Caudill, Jarrow requested a contact email for
Ashurst outside of his employee account, and immediately wrote to it asking
for his collection of broccoli-related research;
• Jarrow, after learning that Ashurst had a non-disclosure agreement with
Caudill, “offered to pay [Kean Ashurst] to deliver on [Caudill’s] new formula
for Jarrow Formulas” (quoting trial testimony) (alterations in original);
• Jarrow accepted Ashurst’s advice to “lay on some BS” when discussing
broccoli products with Caudill;
• Jarrow never informed Ashurst that he should stop working on broccoli-seed-
extract products.
Taken together, these pieces of evidence show ill will towards Caudill, and a disregard of
Caudill’s rights. They therefore give sufficient evidence to support the jury’s finding of willful
and malicious misappropriation.
b. The Exemplary Damages and Attorney Fees Were Appropriate
Finally, in a footnote, Jarrow asserts that if the court orders a new trial on compensatory
damages but affirms the finding of willful and malicious conduct, we should still vacate the
exemplary damages, because they are tied to the compensatory damages, see Tex. Advanced
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 31
Optoelectronic, 895 F.3d at 1318, as well as the attorneys’ fees award, which are based on
degree of success. Because we do not disturb the compensatory damages award, the exemplary
damages and attorneys’ fees award do not need to be reassessed, and Jarrow does not assert any
other error in those awards.
III. CONCLUSION
The judgment of the district court is AFFIRMED in full.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 32
____________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
____________________________________________________
KAREN NELSON MOORE, Circuit Judge, concurring in part and dissenting in part.
I join in the bulk of the per curiam opinion. I write separately because I would hold that
the jury improperly awarded Caudill for its research-and-development costs because the relevant
trade secret was not destroyed. As a result, I would reverse the district court’s award of
compensatory damages and remand for recalculation.
The majority correctly states that courts flexibly consider damages in trade-secrets
disputes. But that flexibility has one relevant limit: a plaintiff may only recover “the value of
the trade secret if it has been destroyed through a public disclosure by the defendant.”
Restatement (Third) of Unfair Competition § 45, cmt. d (Am. L. Inst. 1995).
In the often-cited case of University Computing Co. v. Lykes-Youngstown Corp., the Fifth
Circuit justified this rule by noting that “in most cases the defendant has utilized the secret to his
advantage with no obvious effect on the plaintiff save for the relative differences in their
subsequent competitive positions.” 504 F.2d 518, 535 (5th Cir. 1974). If the secret is not
destroyed, “the plaintiff retains the use of the secret” and therefore “the total value of the secret
to the plaintiff is an inappropriate measure.” Id.; see Softel, Inc. v. Dragon Med. & Sci.
Commc’ns, Inc., 118 F.3d 955, 969 (2d Cir. 1997). Thus, if a trade secret is not destroyed or
revealed, the trade secret’s total value is not an appropriate basis for calculating damages. If the
plaintiff keeps the goose, the defendant is on the hook for only the value of the stolen golden
eggs.
The Restatement presents an illustrative example:
A and B are competing manufacturers of poultry vaccines. A spends $400,000 to
develop a secret process for the production of a new vaccine. B appropriates the
trade secret and begins to produce the vaccine in competition with A. B earns
$50,000 in net profits on sales of the vaccine. In the absence of evidence
indicating loss to A in excess of $50,000, A may recover B’s $50,000 profit in
addition to the award of an injunction prohibiting further use of the process by B.
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 33
Restatement (Third) of Unfair Competition § 45, illustration 2 (Am. L. Inst. 1995). That
illustration strongly resembles this case: A (Caudill) spends a large amount of money
developing a production process, B (Jarrow) misappropriates it and earns profits from using the
same process, and A can recover the profits B made, but not the money that A spent on research
and development. Adhering to this rule makes sense because, as University Computing
explained, A (Caudill) retains the ability to profit from its trade secret.
The district court dismissed this argument, concluding that the jury did not award Caudill
all its requested research-and-development damages. R. 530 (Mem. Op. re: Mot. for J. as a
Matter of Law at 48–49) (Page ID #25945–46). But the parties agree (and I do, too,) that the
jury did award Caudill all the research-and-development costs that it incurred while it employed
Ashurst.1 This calls the Restatement’s hypothetical to mind. We should therefore apply the
prohibition on the recovery of research-and-development damages to this award.
Against this conclusion, Caudill argues that Jarrow did destroy or diminish Caudill’s
trade secret by misappropriating and using it, or at least that the jury may have so found.
Appellee’s Br. at 36. But this cannot be correct. If a trade secret is “destroyed” whenever a
company misappropriates and uses it without revealing its contents or destroying the physical
embodiment of the secret, then the secret would be destroyed in every trade-secret case. It would
be pointless to have a rule limiting research-and-development recovery to cases involving a trade
secret’s destruction. Caudill cannot square the jury’s award here with foundational trade-secrets
law.
Further, the majority implies that the $2,023,000 award of compensatory damages
represents the money Jarrow saved by not expending its own resources on research and
development. If this were indeed how the jury had conceived of these damages, they should
properly have been included in its “unjust enrichment” award, rather than its award for Caudill’s
1
The amount of actual losses awarded almost exactly matches Caudill’s research-and-development
expenses over that time. R. 492-1 (Mem. in Supp. of Renewed Mot. for J. as a Matter of Law at 25 & n.11) (Page
ID #21929). The parties agree that the award reflects Caudill’s research-and-development costs over that roughly
eight-year period. Id.; Appellee Br. at 41. As a result, although we may not know with literal certainty that the jury
based its damages award on those research-and-development costs, I believe that it is sufficiently obvious that we
may address the legal error in the jury’s award. See Voeltz v. Arctic Cat, Inc., 406 F.3d 1047, 1051 (8th Cir. 2005).
No. 21-5345 Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc. Page 34
“actual losses.” R. 435 (Verdict at 3) (Page ID #19783). That the jury awarded the exact
amount of Caudill’s research-and-development expenses while Ashurst worked there as
Caudill’s “actual losses” is an indication that the jury improperly awarded Caudill the value of its
trade secret as compensation, even though the trade secret was not destroyed. Moreover, the
award here transgresses Kentucky’s law of damages. In Kentucky, as in many other states,
“actual or compensatory damages seek to make the plaintiff whole by awarding an amount of
money designed to equal the wrong done.” Ronald W. Eades, Kentucky Law of Damages § 2:1
(2022) (quoting Mo-Jack Distrib., LLC v. Tamarak Snacks, LLC, 476 S.W.3d 900, 910 (Ky. Ct.
App. 2015)). “The object is not to place the plaintiff in a better position than he would have
been had the wrong not been done.” Ky. Cent. Ins. Co. v. Schneider, 15 S.W.3d 373, 374–75
(Ky. 2000) (citing Robert E. Anderson et al., 22 Am. Jur. 2d Damages § 27 (2022)); see also
Reed v. Mercer Cnty. Fiscal Ct., 295 S.W. 995, 996 (Ky. 1927) (“Of course the injured party
may not make a profit out of the injury”). A court may not issue an award that “result[s] in a
windfall” for one party “and put[s] it in a position better than before” the harm occurred. Level 3
Commc’ns, LLC v. TNT Constr., Inc., 220 F. Supp. 3d 812, 823 (W.D. Ky. 2016).
In sum, the compensatory-damages award permits Caudill to collect millions of dollars
spent developing its trade secret while retaining the ability to profit indefinitely off that same
trade secret. Because the jury’s award runs afoul of applicable legal principles, I would vacate
the compensatory-damages award and respectfully dissent from part II.C.3 of the per curiam
opinion.2 I concur in the per curiam except as noted.
2
I additionally dissent from Part II.C.5.b. The Kentucky Uniform Trade Secrets Act caps exemplary
damages at twice the compensatory award. Ky. Rev. Stat. § 365.884(2). Because I would send the compensatory
award back to the district court for recalculation, the exemplary award could require adjustment as well.