Sedona Conference Issues Draft DTSA Jury Instructions

Why the Draft DTSA Jury Instructions Matter

Jury instructions are not ceremonial language delivered shortly before deliberations. They identify the legal questions jurors must answer, allocate burdens of proof, define essential terms, and establish the path from evidence to verdict.

In a trade secret case, that path can become unusually tangled. The parties may disagree about what the alleged secret actually is, whether it was sufficiently protected, whether the defendant acquired or used it improperly, and whether the claimed damages reflect real economic harm rather than creative arithmetic wearing a necktie.

Before the Sedona project, federal courts often relied on state-law instructions based on versions of the Uniform Trade Secrets Act, criminal Economic Espionage Act authorities, locally drafted instructions, and prior trial orders. Those materials can be useful, but they were not created as one coordinated set of civil DTSA instructions.

The draft therefore offered more than standardized courtroom language. It gave lawyers a practical checklist for building a case from the beginning. When the likely trial questions are visible early, discovery can focus on evidence that will actually matter instead of producing twelve terabytes of documents and a collective sense of regret.

The Legal Foundation of a DTSA Claim

The Plaintiff Must Establish a Protectable Trade Secret

The DTSA broadly covers financial, business, scientific, technical, economic, and engineering information. Examples may include formulas, programs, methods, processes, designs, customer information, pricing strategies, manufacturing specifications, source code, research data, and compilations of otherwise familiar facts.

Broad coverage does not mean automatic protection. Information generally must satisfy two central requirements. First, the owner must have taken reasonable measures to keep it secret. Second, the information must derive independent economic value from not being generally known or readily ascertainable through proper means by someone who could benefit from its disclosure or use.

A company cannot simply place the word “confidential” on a neglected folder and declare victory. Courts look at measures in context, including access restrictions, nondisclosure agreements, encryption, employee training, document markings, physical controls, vendor obligations, exit procedures, monitoring, and the actual treatment of the information in daily operations.

The Claim Requires Misappropriation

The statute recognizes several routes to misappropriation. A defendant may improperly acquire a trade secret, disclose it without authorization, or use it without consent while possessing the required knowledge concerning its confidential origin.

Improper means can include theft, bribery, misrepresentation, electronic espionage, or the breach or inducement of a duty to preserve secrecy. Proper means include independent development, reverse engineering, and other lawful acquisition. That distinction is essential: trade secret law protects against commercial misconduct, not ordinary competition or independent ingenuity.

The Interstate-Commerce Requirement Still Exists

A civil DTSA claim also requires a connection between the trade secret and a product or service used in, or intended for use in, interstate or foreign commerce. That element is often easy to establish in a modern business environment, but it should not be treated as invisible. A carefully designed jury instruction prevents the parties from discovering late in the case that everyone remembered the dramatic evidence but forgot a statutory element.

What the Sedona Draft Covered

The public-comment draft followed the familiar model-instruction format: proposed language, supporting legal authority, and explanatory commentary. The comments were especially significant because they identified areas in which courts had adopted different approaches or the law remained unsettled.

The document was organized around five broad subjects:

• An introduction to trade secret misappropriation
• The elements of a DTSA misappropriation claim
• The existence of a protectable trade secret
• Improper acquisition, unauthorized disclosure, and unauthorized use
• Actual loss, unjust enrichment, reasonable royalties, and other damages issues

This structure helps separate questions that are frequently blended together. A plaintiff might prove that an employee downloaded files, for example, without proving that every downloaded file contained a trade secret. It might prove that information was secret without proving that the defendant used it. It might prove misappropriation without proving the breathtaking damages number displayed on the expert’s final slide.

Major Issues Highlighted by the Draft

Identifying Each Trade Secret with Particularity

One of the hardest questions in trade secret litigation is deceptively simple: What, precisely, is the secret?

A description such as “our proprietary technology,” “customer knowledge,” or “confidential business methods” may sound impressive in a complaint, but it does not necessarily distinguish protected information from public knowledge, employee skill, or an entire product. Defendants need enough detail to understand the accusation, courts need defined boundaries for discovery, and jurors need to know what they are evaluating.

At the same time, plaintiffs cannot be required to publish their secrets in an unsealed filing. Federal courts therefore rely on protective orders, sealed submissions, numbered trade secret disclosures, phased discovery, and other case-management techniques.

The Ninth Circuit’s 2025 Quintara Biosciences decision illustrates the difficulty. The court concluded that a district court had gone too far by striking several asserted trade secrets early in discovery. Whether information has been identified with sufficient particularity is often a fact-intensive issue better addressed after an opportunity to refine the identification through discovery, at summary judgment, or at trial.

The practical lesson is balance. A trade secret description should be specific enough to define the claimed property without becoming a public instruction manual for reproducing it.

Determining Whether Secrecy Measures Were Reasonable

Reasonable measures are evaluated under the circumstances. A two-person startup and a global pharmaceutical company will not necessarily use identical safeguards. The question is whether the measures reasonably reflected the value, sensitivity, accessibility, and operational use of the information.

The Sedona project recognized that examples can help jurors but can also tilt the instruction toward one side. A list emphasizing passwords, contracts, and access controls might sound like a plaintiff’s closing argument. A list emphasizing occasional internal sharing might sound like the defense wrote it during lunch.

For that reason, reasonable-measures instructions must be tailored carefully. The jury should receive neutral factors connected to the actual information at issue, not a generic cybersecurity wish list.

Handling Combination and Compilation Trade Secrets

A combination trade secret may consist of individual components that are publicly known while the specific selection, arrangement, integration, or interaction of those components remains secret and valuable.

Courts have disagreed about how much of a combination must be acquired or used before liability can attach. Some decisions favor an all-elements approach. Others recognize misappropriation when a substantial portion of the protected combination has been taken or used.

The public-comment draft brought this division into focus. The final publication ultimately acknowledged the competing approaches through alternative instructions, leaving courts to select the standard supported by controlling law. This is a useful reminder that model instructions can organize a dispute without magically erasing a circuit split.

Separating Actual Use from Inevitable Disclosure

The instructions distinguish proven acquisition, disclosure, or use from the idea that a former employee will inevitably rely on remembered information in a new job. The DTSA permits relief against threatened misappropriation, but it also limits injunctions that would improperly restrain lawful employment based merely on what a person knows.

For liability based on unauthorized disclosure or use, speculation is not a substitute for evidence. Similar products, suspicious timing, or employment with a competitor may support an inference when combined with other facts, but they should not automatically convert career mobility into misappropriation.

Deciding Whether Retention Alone Is Enough

Another unsettled question is whether merely retaining information after lawful access ends constitutes improper acquisition or another form of misappropriation. The answer may depend on the jurisdiction, contractual duties, demands for return, later access, copying activity, and evidence of disclosure or exploitation.

The distinction matters in employee-departure cases. Possessing an old file, intentionally preserving a development archive, and transferring a technical library to a competitor are not necessarily equivalent acts. Instructions should help jurors evaluate the conduct proved rather than collapsing every form of possession into the same legal category.

Damages May Be the Most Difficult Part

The DTSA allows recovery for actual loss and unjust enrichment not already included in that loss. When neither measure is adequately proved, a court may award a reasonable royalty for unauthorized disclosure or use. Willful and malicious misappropriation may also support exemplary damages and attorney fees.

Actual Loss and Lost Profits

Actual loss may include lost sales, price erosion, increased costs, lost business opportunities, reduced company value, or diminished value of the trade secret. The plaintiff must connect the loss to the misappropriation with reasonable certainty. A market decline, unsuccessful product launch, or lost customer is not automatically attributable to the defendant simply because it occurred during the same calendar year.

Unjust Enrichment and Avoided Development Costs

Unjust enrichment focuses on the benefit obtained by the defendant. Possible measures include profits from sales, avoided research expenses, saved development time, or a competitive head start.

The Second Circuit’s Syntel decision demonstrates the limits of avoided-cost damages. The court vacated a substantial award where the defendant’s unjust gain was already addressed through the plaintiff’s actual-loss recovery and the additional award would have produced an improper windfall under the facts presented.

That does not make avoided costs irrelevant. It means damages experts must explain why the claimed benefit resulted from misappropriation, why it is not duplicative, and how it relates to the commercial value of the specific secrets proved at trial.

Apportionment and Double Recovery

A defendant’s product may contain public technology, independently developed features, acquired components, employee know-how, and one or more misappropriated trade secrets. Damages should reflect the value attributable to the wrongful conduct rather than treating the entire product as if it sprang fully formed from a stolen spreadsheet.

Apportionment can become especially difficult when several asserted secrets contribute differently to a product. Instructions must guard against both undercompensation and double recovery while giving jurors a manageable method for evaluating expert testimony.

Foreign Conduct and Worldwide Sales

The Seventh Circuit’s Motorola Solutions v. Hytera decision confirmed that the DTSA can support damages related to foreign conduct when the statutory requirements for extraterritorial application are satisfied, including an act in furtherance of the offense within the United States.

That holding makes geographic causation a major trial issue in international disputes. Parties may need to trace domestic communications, recruiting, downloads, meetings, transfers, development decisions, and sales activity rather than merely pointing to a worldwide revenue total.

How the Instructions Can Shape Discovery and Trial Strategy

The greatest value of model jury instructions may arise long before a jury is selected. Each instruction can be converted into a discovery question and an evidence category.

For every alleged trade secret, a plaintiff should be prepared to identify:

• The exact information claimed as secret
• The people who had access to it
• The measures used to preserve secrecy
• The source of its economic value
• The evidence linking the defendant to acquisition, disclosure, or use
• The loss or benefit associated with the alleged conduct

A defendant can use the same framework in reverse. It can investigate public sources, independent-development records, reverse-engineering evidence, access histories, alternative causes of loss, and contributions unrelated to the alleged secrets.

This instruction-first approach also improves settlement analysis. When both sides can see how the legal elements may be presented to jurors, unrealistic assumptions tend to become easier to identify. Nothing encourages practical negotiation quite like imagining twelve strangers asking why Exhibit 847 was supposed to prove a billion dollars in damages.

Practical Experiences and Lessons for DTSA Litigation Teams

Trade secret cases often begin in an atmosphere of urgency. A senior engineer has resigned, a sales executive has downloaded customer data, or a competitor has released a product suspiciously similar to one still under development. The instinct is to move immediately, preserve devices, seek emergency relief, and describe every sensitive document as a crown jewel.

Experience reflected in federal trade secret litigation suggests that the first challenge is usually not proving that something alarming happened. It is defining the protected information. A forensic report showing that 20,000 files were copied can be powerful evidence of conduct, but file volume does not establish trade secret status. The litigation team must separate genuine secrets from public materials, administrative documents, ordinary skills, obsolete files, and information the company itself distributed without meaningful restrictions.

A useful practice is to build a numbered trade secret schedule early. Each entry should describe one secret or coherent compilation, identify its boundaries, explain its value, list the secrecy measures connected to it, and match it to evidence of alleged misappropriation. This schedule often becomes the backbone of document requests, depositions, expert reports, summary-judgment briefing, proposed instructions, and the verdict form.

Another recurring lesson is that corporate policy and corporate reality are not always close relatives. A company may have a beautifully written confidentiality policy while employees routinely place sensitive documents in unrestricted shared drives. Conversely, a smaller business may lack an elaborate policy manual but consistently limit access, use individual credentials, require confidentiality agreements, and discuss secrecy obligations with everyone who receives the information.

Trial teams therefore benefit from interviewing operational witnesses before making sweeping claims about security. Information-technology personnel, product managers, human-resources staff, laboratory supervisors, and records administrators may know more about actual access practices than the executive who signed the declaration supporting an emergency motion.

Damages preparation should also begin earlier than many parties expect. The liability and damages stories must fit together. When a plaintiff alleges ten different secrets but presents one undivided damages number, jurors may have no principled way to calculate an award if they find only two secrets protectable. Experts should consider alternative calculations tied to different liability findings and clearly distinguish actual loss, defendant profits, avoided costs, head-start value, and reasonable royalties.

Defendants face a related practical challenge: documenting independent development. Contemporaneous design notes, source-control histories, test results, meeting records, vendor communications, and dated prototypes can be more persuasive than testimony offered years later that everyone simply remembers building the product independently. Good records turn “trust us” into a timeline.

Finally, both sides should test their proposed instructions with people who are not trade secret specialists. Lawyers and experts can become comfortable with phrases such as “independent economic value,” “readily ascertainable,” and “unjust enrichment not addressed in computing actual loss.” Jurors hear those phrases for the first time after days or weeks of technical testimony.

A strong instruction should simplify the law without changing it. A strong trial presentation should then connect each instruction to concrete evidence. If the jury cannot tell what the secret is, how it was protected, what the defendant did, and what financial consequence followed, even a mountain of exhibits may amount to an expensive paperweight.

Conclusion

The Sedona Conference’s draft DTSA jury instructions represented a major step toward greater consistency in federal trade secret trials. They organized the statute’s core requirements, identified recurring disputes, and gave courts and litigants a shared starting point for addressing particularity, reasonable secrecy measures, combination secrets, misappropriation theories, and damages.

The instructions do not eliminate differences among federal circuits, nor do they bind judges. Their practical influence comes from something more modest and useful: they make the questions visible. That visibility can improve pleadings, discovery planning, expert analysis, settlement decisions, trial presentations, and verdict forms.

For companies, the message is equally practical. Trade secret protection is not created on the day a lawsuit is filed. It is built through clear identification, consistent safeguards, disciplined access, enforceable agreements, credible records, and employees who understand that “confidential” is an operating practice rather than decorative vocabulary.

SEO Information