Trade Secrets Damages Case Returns to Trial Court . . . Again
This is a long post, but the trade secret misappropriation case between R.K. Enterprise and Pro-Comp Management is setting several important precedents regarding damages under the Arkansas Trade Secrets Act (ATSA).
The trial court originally held that Pro-Comp misappropriated R.K.’s trade secrets, but the trial court permitted R.K. to decide whether it wanted remedies under the Arkansas Trade Secret Act or companion tort claims. Judgment of $262,303.00 was entered on the tort claims.
The Arkansas Supreme Court reversed, holding that the ATSA preempts or displaces tort causes of action. R.K. Enterprise v. Pro-Comp Management, 356 Ark. 565 (2004). By doing so the court joined the clear majority of jurisdictions with similar statutes. The case was reversed for a determination of damages pursuant to the ATSA only.
On remand, the trial court found that damages were too speculative for either actual losses or unjust enrichment. The court entered judgment for R.K., holding that Pro-Comp could not establish damages under the ATSA. In its determination, the court relied on Brown v. Ruallam, 73 Ark.App. 296 (2001) that the court could not look to the general law of unjust enrichment when determining unjust enrichment under the ATSA.
Pro-Comp appealed, and the Supreme Court reversed Brown, holding that a trial court may look to the general law of unjust enrichment when deciding an ATSA case. Pro-Comp Management, Inc. v. R.K. Enterprises, LLC, 366 Ark. 463 (2006). The court affirmed the ruling of no damages for actual loss but reversed for a consideration of unjust enrichment pursuant to the reversal of Brown. Id.
While this case has produced some important rules for Arkansas trade secret law, the parties may end up exactly where they started in 2004.
