The Federal Circuit Weighs $2.8 Million Attorneys’ Fee Award for Failure to Identify Trade Secrets

Most trade secret plaintiffs know the risk of failing to identify their trade secrets: losing at summary judgment. Other consequences are rarely considered. However, a case now before the Federal Circuit may decide when an identification failure can lead to a fee award.

Why it Matters 

• The DTSA allows fees when a misappropriation claim is made in bad faith. Courts require both objective speciousness and subjective misconduct. 

• A failure to identify trade secrets can support the first element. The open question is how much it contributes to the second.

• The Federal Circuit is hearing this trade secret dispute and applying Tenth Circuit law, which gives it a chance to set a marker for practitioners. 

Applied Predictive Technologies v. MarketDial (Fed. Cir., No. 25-1713)

APT sued a competitor in 2018 and claimed fourteen trade secrets, many of them held to be compilations of compilations at the summary judgement stage. Applied Predictive Techs., Inc. v. MarketDial, Inc., No. 2:19-cv-496-JNP-CMR, D.I. 689 (D. Utah Aug. 12, 2024). The court had raised concerns early. In May 2021, the magistrate judge found that APT’s interrogatory responses referred to various alleged trade secrets and contained generalized descriptions of alleged trade secrets but never identified specific categories of trade secret information. Applied Predictive Techs., Inc. v. MarketDial, Inc., No. 2:19-cv-496-JNP-CMR, D.I. 159 (D. Utah May 6, 2021). In July 2021, the district court agreed with the magistrate judge’s finding that APT had failed to establish that those responses identified trade secrets with sufficient specificity warranting attorneys’ eyes only protection. Applied Predictive Techs., Inc. v. MarketDial, Inc., No. 2:19-cv-496-JNP-CMR, D.I. 181 (D. Utah July 13, 2021). In 2022, a hard drive containing APT files came to light and went through forensic review, but according to the Appellee at oral argument, the trade secret identification did not change afterward. 

The district court eventually granted summary judgment to MarketDial. It found that APT’s interrogatory responses offered only cursory, high-level descriptions of categories or sources of information, and rejected APT’s compilations of compilations as groupings created after the fact for litigation. The Federal Circuit affirmed in a separate appeal. See No. 24-1751 (Fed. Cir. 2026). 

The district court also awarded MarketDial $2,807,755.79 in fees. Applied Predictive Techs., Inc. v. MarketDial, Inc., No. 2:19-cv-496-JNP-CMR, D.I. 708 (D. Utah Mar. 25, 2025). In its briefing, APT’s fee appeal argues that the fee order simply repackages the summary judgment ruling, which would expose every losing plaintiff to fees. 25-1713, D.I. 18 at 76-77 (Fed. Cir. 2026). MarketDial argues that the court found “something more.” 25-1713, D.I. 29 at 53 (Fed. Cir. 2026). It points to the court’s warnings (D.I. 29 at 52), briefs full of “paragraph-long string cites,” (D.I. 29 at 60) and no withdrawal of claims “when it became apparent that it had no evidence to support them” (D.I. 29 at 54).

Takeaway: The case puts squarely before the Federal Circuit what it takes to show subjective misconduct. A failure to identify trade secrets may support an inference of bad faith, but on its own it is likely not enough. How the court treats the rest of the record could signal what more is required. That answer will tell plaintiffs and practitioners when a lost identification fight stops being a merits problem and becomes a fee problem.

Best Practices:

• Investigate and assess before going to court. Trade secret jurisprudence under the DTSA is making clearer the need to thoroughly vet your trade secret categories and identification before filing suit and, relatedly, the importance of going through the identification exercise and establishing a trade secret management framework before the misappropriation occurs.
• Identify early and refine when warned. “We’ll figure it out later” is not a strategy. When a court signals skepticism, treat it as a deadline to sharpen the identification, because ignoring it could help build a defendant’s fee record.
• New evidence calls for new identification. If discovery turns up something significant, use it to refine what the trade secrets are, not just to prove misappropriation.
• Volume is not precision. See Tools of the Trade (Secrets): Not Everything Makes the Cut | Mintz

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